Following is the income statement for Mueller Mufflers for the month of June 2018:

Requirement 1. Calculate the degree of operating leverage. (Round to four decimal places.)

Requirement 2. Use the degree of operating leverage calculated in Requirement 1 to estimate the change in operating income if total sales increase by

30% (assuming no change in sales price per unit). (Round interim calculations to four decimal places and final answer to the nearest dollar.)

Requirement 3. Verify your answer in Requirement 2 by preparing a contribution margin income statement with the total sales increase of

30%.

Mueller Mufflers Contribution Margin Income Statement Month Ended June 30, 2018 Net Sales Revenue (300 units x $125) $ 37,500 Variable Costs (300 units x $50) 15,000 Contribution Margin 22,500 Fixed Costs 12,000 $ 10,500 Operating Income Select the labels and enter the amounts to calculate the degree of operating leverage for Mueller Mufflers Degree of operating leverage The estimated change in operating income will be $ Mueller Mufflers Contribution Margin Income Statement Month Ended June 30, 2018 Net Sales Revenue Variable Costs Contribution Margin Fixed Costs Operating Income