Production costs include which of the following? Direct Materials and Administrative costs. Indirect Labor, Indirect Materials and Selling costs. Direct Materials, Direct Labor, Manufacturing Overhead and Administrative costs. Direct Materials, Direct Labor and Manufacturing Overhead. In a contribution format income statement, Sales Revenues minus Variable Expenses equals Gross Margin Contribution Margin Net Income Net Operating Income A company sells one model of a synthetic leather basketball. The basketballs sell for $20 each, and the variable expenses for each basketball are $14. The company has $1,200 of fixed expenses. The company sold 600 basketballs last year. Based on this data from last year, the company's degree of operating leverage is 1.5. Assume that the fixed expenses, selling price and variable expense per basketball remain the same. Using the degree of operating leverage, by what percentage will the company's profit increase if its sales revenue increases by 40% ? Profit increases by 30% Profit increases by 40% Profit increases by 15% Profit increases by 60%