Modern Artifacts can produce keepsakes that will be sold for $80 each. Nondepreciation fixed costs are $1,000 per year, and variable costs are $60 per unit. The initial investment of $3,000 will be depreciated straight-line over its useful life of 5 years to a final value of zero, and the discount rate is 10%.

a.	What is the degree of operating leverage of Modern Artifacts when sales are $7,000? (Do not round intermediate calculations. Round your answer to 2 decimal places.)

Degree of operating leverage

b.	What is the degree of operating leverage when sales are $12,000? (Do not round intermediate calculations. Round your answer to 2 decimal places.)

Degree of operating leverage