Modern Artifacts can produce keepsakes that will be sold for $40 each. Nondepreciation fixed costs are $600 per year, and variable costs are $20 per unit. The initial investment of $1,800 will be depreciated straight-line over its useful life of 9 years to a final value of zero, and the discount rate is 13%.

a. what is the degree of operating leverage of modern artifacts when sales are $1,800? (do not round intermeadiate calculations. Round your answer to 2 decimal places)

degree of operating leverage ______________

b. what is the degree of operating leverage when sales are 2,880? (do not round intermediate calculations. Round your answer to 2 decimal place)

Degree of operating leverage _________

c. Why is operating leverage different at these two levels of sales?

degree of operating leverage is (higher or lower) when profits are (higher or lower)