3-14

Oslo Company prepared the following contribution format income statement based on a sales volume of 1,000 units (the relevant range of production is 500 units to 1,500 units):

Sales	$	80,000
Variable expenses		52,000
Contribution margin		28,000
Fixed expenses		21,840
Net operating income	$	6,160

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 $21,840 and the total fixed expenses are $52,000. Under this scenario and assuming that total sales remain the same, what is the degree of operating leverage? (Round your answer to 2 decimal places.)