A Cruise line offers nightly dinner cruises departing from several cities on the eastern coast of the United States including Charleston, Baltimore, and Alexandria. Dinner cruise tickets sell for $50 per passenger. Live It Cruiseline's variable cost of providing the dinner is $20 per passenger, and the fixed cost of operating the vessels (depreciation, salaries, docking fees, and other expenses) is $270,000 per month. The company's relevant range extends to 14,000

monthly passengers. The breakeven sales are 9,000 tickets sold.

a. Compute the operating leverage factor when the Cruiseline sells 12,000 dinner cruises.

b. If volume increases by 7%, by what percentage will operating income increase?

c. If volume decreases by 2%, by what percentage will operating income decrease?