Modern Artifacts can produce keepsakes that will be sold for $90 each. Nondepreciation fixed costs are $1,300 per year, and variable costs are $50 per unit. The initial investment of 3,900 will be depreciated straight-line over its useful life of 5 years to a final value of zero, and the discount rate is 12%.

a. What is the degree of operating leverage of Modern Artifacts when sales are $4,950? 2 decimal places

Degree of operating leverage:

b. What is the degree of operating leverage when sales are $ 9, 630? 2 decimal places

Degree of operating leverage:

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