Kern Company prepared the following tentative budget for next year: Sales $500,000 Selling price $5 per unit Variable expenses $300,000 Fixed expenses $150,000 The sales manager argues that the unit selling price could be increased by 20%, with an expected volume decrease of only 10%. If Kern incorporates these changes in its budget, what should be the budgeted operating income? The following is Addison Corporation's contribution format income statement for last month: Sales $1,000,000 Less: variable expenses 700.000 Contribution margin 300,000 Less: fixed expenses 180,000 Operating income $120,000 The company has no beginning or ending inventories. A total of 20,000 units were produced and sold last month What is the company's degree of operating leverage? 0.4