D Chapter 20 handouts De Layout References Mailings Review View E20-35Computing degree of operating leverage Following is the income statement for Marrow Mufflers for the month of June 2018: MARROW MUFFLERS Contribution Margin Income Statement Month Ended June 30, 2018 Net Sales Revenue (140 units x 5250) Variable Costs (140 units X 550) Contribution Margin Fixed Costs Operating Income $ 35,000 7,000 28,000 11,500 $ 16,500 Requirements 1. Calculate the degree of operating leverage. (Round to four decimal places.) 2 Use the degree of operating leverage calculated in Requirement to estimate the change in operating income if total sales increase by 40% (assuming no change in sales price per unit). (Round interim calculations to four decimal places and final answer to the nearest dollar.) 67.8800% 3. Verify your answer in Requirement 2 by preparing a contribution margin income statement with the total sales increase of 40%