Oslo Company prepared the following contribution format income statement based on a sales volume of 1,000 units (the relevant range of production is 500 units to 1,500 units):

Sales$ 20,000Variable expenses13,000Contribution margin7,000Fixed expenses3,780Net operating income$ 3,220

Foundational 2-12 (Algo)

Required:

12. What is the degree of operating leverage?

Note: Round your answer to 2 decimal places.

13. Using the degree of operating leverage, what is the estimated percent increase in net operating income that would result from a 5% increase in unit sales?