Degree of Operating Leverage, Percent Change in Profit

Required:

Process $1$

Process $2$

Suppose that sales are $20$ percent higher than budgeted. By what percentage will operating income increase for each process?

Process $1$

Process $2$

What will be the increase in operating income for each system? Round your answers to the nearest dollar.

Process $1,$$

$x$

Process $2$

$x$

Process $1$

Process $2$

$

${\displaystyle \underset{\phantom{}}{\overset{\phantom{}}{}}}x$

What if unit sales are $10$ percent lower than budgeted? By what percentage will operating income decrease for each process?

Process $1$

Process $2$

Process $1$

$x$

Process $2$

$x$