Part #1:

A new restaurant is ready to open for business. It is estimated that the food cost (variable cost) will be 0.42% of sales, while fixed cost will be $450,000. The first years sales estimates are $1,166,963. Calculate the firms operating breakeven level of sales.

Part #2:

A new restaurant is ready to open for business. It is estimated that the food cost (variable cost) will be 40% of sales, while fixed cost will be $442,381. The first years sales estimates are $1,250,000. Calculate the firms degree of operating leverage (DOL).