3. What is the variable expense ratio?

12. What is the degree of operating leverage?

13. Using the degree of operating leverage, what is the estimated percent increase in net operating income of a 5% increase in sales?

14. Assume that the amounts of the companys total variable expenses and total fixed expenses were reversed. In other words, assume that the total variable expenses are $6,000 and the total fixed expenses are $12,000. Under this scenario and assuming that total sales remain the same, what is the degree of operating leverage?

15. Assume that the amounts of the companys total variable expenses and total fixed expenses were reversed. In other words, assume that the total variable expenses are $6,000 and the total fixed expenses are $12,000. Using the degree of operating leverage, what is the estimated percent increase in net operating income of a 5% increase in sales?

0 Required information [The following information applies to the questions Oslo Company prepared the following contribution format income statement based on a sales volume of 1,000 units (the displayed below. relevant range of production is 500 units to 1,500 units): Sales Variable expenses Contribution margin Fixed expenses Net operating income $ 20,000 12,000 8,000 6,000 $ 2,000 12. What is the degree of operating leverage? Degree of operating leverage