A mid-sized home improvement company, Blossom, is evaluating the cost structure and profit-building potential of its lumber business in light of changing industry circumstances. Up until now, it has been selling lumber in one location very effectively and profitably, as evidenced by its most current income results, presented in the following contribution margin format. Sales $360,150 Variable costs 111,000 Contribution margin 249,150 Fixed costs 173,650 Operating income $75,500 The changing circumstances in the industry relate to a key competitor, which (rumor has it) will be filing for bankruptcy very soon. If this happens, Blossom anticipates an almost immediate 20% jump in its lumber sales volume, with additional increases likely over time. For the current period, what is the degree of operating leverage for Blossom's lumber business? (Round answer to 2 decimal p e.g. 15.25.) Degree of operating leverage 3.30 Your answer is correct. Assuming that the rumor is true, and further assuming that the predicted immediate higher sales level for Blossom fits within the company's current capacity, what would happen to its income? Operating income would increase by $ 49,830 (c) Blossom wants to appropriately plan for the future. If the competitor does go out of business, Blossom will need to increase its lumber capacity to handle the long-range increase in sales volume. It predicts volume could increase by as much as 40% from current levels within one year's time of the competitor closing. Management and board discussions recommend planning for an expansion that would increase its current fixed costs by 50%. How much additional volume (compared to that in part (b)) would be needed to cover these higher fixed costs and still generate the same income as calculated in part (b)? (Round answer to O decimal places, e.g. 15%) Increase in sales volume %