Superior Company has sales volume of 90,000 units with a unit selling price of $140 per unit. The variable expenses are $70 per unit, and the total fixed expenses are $4,200,000.

3. What is the degree of operating leverage?*

A-2.00

B-3.00

C-4.00

D-5.00

E-None of the above

4. If the sales volume increases by 10%, and all other items are the same, what will be the effect on the net operating income?*

A-The net operating income will increase by $630,000

B-The net operating income will increase by $2,100,000

C-The net operating income will increase by $2,730,000

D-The net operating income will increase by $6,300,000

E-None of the above

THESE ARE THE ONLY GIVEN