2. Assume that Cove sold 405 cakes last month. Calculate the companys degree of operating leverage. (Do not round intermediate calculations. Round your answer to 4 decimal places.)

3. Using the degree of operating leverage calculated in Requirement 2, calculate the change in profit caused by a 5 percent increase in sales revenue. (Round your final answer to 2 decimal places (i.e. .1234 should be entered as 12.34%.))

Cove's Cakes is a local bakery. Price and cost information follows: 1361 Variable cost per cake 2.17 1.09 0.21 $3,853.20 Ingredients Direct labor Overhead (box, etc.) Fixed cost per month