Sally sells authentic Amish quilts on her website. Suppose Sally expects to sell 2,000 quilts during the coming year. Her average sales price per quilt is $ 375, and her average cost per quilt is $ 175. Her fixed expenses total $ 200,000. Compute Sally's operating leverage factor at an expected sales level of 2,000 quilts. If sales volume increases 20%, by what percentage will her operating income change? Prove your answer by calculating operating income at a sales volume of 2,000 and at a sales volume of 2,400.

Compute her operating leverage factor. (Round your answer to two decimal places.) First, identify the formula, then compute the operating leverage factor. V = Operating leverage factor If sales volume increases 20%, by what percentage will her operating income change? (Round the percentage to the nearest tenth percent, X.X%.) Operating income will increase by 1%. Compute her operating leverage factor. (Round your answer to two decimal places.) First, identify the formula, then compute the operating leverage factor. v = Operating leverage factor rating income change? (Round the percentage to the nearest tenth percent, X.X%.) Contribution margin If sales volume increases 20%, by w Fixed expenses Operating income Operating income will increase by Variable cost Prove your answer. (Round the percentage to the nearest tenth percent, X.X%.) Original volume (quilts) Add: Increase in volume New volume (quilts) Multiplied by: Unit contribution margin New total contribution margin Less: Fixed expenses New operating income Less: Operating income before change in volume Increase in operating income Percentage change