Alkamost Company has decided to introduce a new product. The new product can be manufactured by either a capital-intensive method or a labor intensive method. The manufacturing method will not affect the quality of the product. The estimated manufacturing costs by two methods are as follows: Capital Intensive Labor Intensive Direct Materials $4 per unit $4.00 per unit Direct Labor $6 per unit $9.00 per unit Variable Overhead $2 per unit $2.60 per unit Fixed Manuf. OH $2,550,000 $1,530,000 Alkamost Company's market research department has recommended an introductory unit sales price of $32.80 The incremental selling expenses are estimated to be $255,000 annually plus 0.80 for each units sold, regardless of manufacturing method. Instruction 1-What is the degree of operating leverage (general term) and how it is affected by the cost structure?