Degree of Operating Leverage, Percent Change in Profit

Ringsmith Company is considering two different processes to make its product$-$process $1$ and process $2.$ Process $1$ requires Ringsmith to manufacture subcomponents of the product in$-$house. As a result, materials are less expensive, but fixed overhead is higher. Process $2$ involves purchasing all subcomponents from outside suppliers. The direct materials costs are higher, but fixed factory overhead is considerably lower. Relevant data for a sales level of $38,000$ units follow:

$\backslash$table$[[,$Process $1,$Process $2],[$Sales$,$$$9,500,000,$$$9,500,000$