Splish Brothers's vice president of finance has offered another option. He suggests a different system that combines personal service at key points in the cafeteria line with a less expensive automated self $-$service system for the other items. The financial information on this system is given below:

Blended Service

System

Sales

$$2,200,000$

Variable costs

Contribution margin

$$880,000$

Fixed costs

Net Income

$$330,000$

$(1)$

Determine the degree of operating leverage for this option. $($Round answer to $2$ decimal places, e$.$g$.15\mathrm{.}25.)$

Operating leverage

$(2)$

How much would net income increase if sales increased by $$220,000?($Round answer to $2$ decimal places, e$.$g$.15\mathrm{.}25\%.)$

Net income

$\%$

$(3)$

Using the margin of safety ratio, how large of a decline in sales could this option sustain before operating at a loss. $($Round margin of safety ratio to $2$ decimal places, e$.$g$.0\mathrm{.}25$ and decline in sales to $0$ decimal places, e$.$g$.125.)$

Margin of safety ratio

Decline in sales

$\%$

$(4)$

Which option do you recommend for Splish Brothers Cafeteria?