a. Sales price increases by $1.00 per cake.

b. Fixed costs increase by $500 per month.

c. Variable costs decrease by $0.35 per cake.

d. Sales price decreases by $0.50 per cake.

2. Assume that Cove sold 400 cakes last month. Calculate the companys degree of operating leverage. (Round your answer to 4 decimal places.)

3. Using the degree of operating leverage, calculate the change in profit caused by a 10 percent increase in sales revenue. (Do not round your intermediate calculations. Round your final answer to 2 decimal places.)