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Jitterbug Incorporated: Upcoming year projections

Sales Revenue: $40,000$ units sold

$$800,000$

Per Unit

Less: Variable Expenses

$-640,{000}_{{?}_{?}}$

$-{16}_{?}$

Contribution Margin

$160,000$

$$4$

Less: Fixed Expenses

$-80,{000}_{{?}_{?}}$

Net Operating Income

$$80,{000}_{?}$

$3.$ Does the company have a good cost structure ir sales should exceed its projections by $10\%?$ Explain.

Yes, because its degree of operating leverage is fairly low.

Yes, because its degree of operating leverage is fairly high.

No$,$ because its degree of operating leverage is fairly high.

No$,$ because its degree of operating leverage is fairly low.