Calculate the degree of operating leverage given the following information: sales of $25,000; variable costs of $13,000; and operating income of $7,000 for year one, and sales of $40,000; variable costs of $15,000; and operating income of $16,000 for year 2.

(Note in book: This question is asking for the degree of operating leverage, DOL. For this problem, you should be calculating the differences between the sales and the operating income for each of the given years. This will allow you to calculate the DOL. Formula touse is: (% change inEBIT) / (% change in sales)