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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$)$:

What is the degree of operating leverage?

Degree of operating leverage

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?

Assume the amounts of the company's total variable expenses and total fixed expenses were reversed. In other words, assume the

total variable expenses are $$6,000$ and the total fixed expenses are $$12,000.$ Under this scenario and assuming total sales remain the

same, what is the degree of operating leverage?

Degree of operating leverage

Assume the amounts of the company's total variable expenses and total fixed expenses were reversed. In other words, assume the

total variable expenses are $$6,000$ and the total fixed expenses are $$12,000.$ Using the degree of operating leverage, what is the

estimated percent increase in net operating income of a $5\%$ increase in unit sales?