The following is last month's Contribution Formatted Income Statement: Sales $800,000 Variable Expenses $500,000 Contribution Margin $300,000 Fixed Expenses $200,000 Net Income $100,000 What is the Company's DEGREE OF OPERATING LEVERAGE AND WHAT WILL HAPPEN TO NET INCOME IF SALES DECREASE BY 15%?

Select one:

a. Degree of Operating Leverage is 8, and Net Income would Decrease by 120%

b. Degree of Operating Leverage is 3, and Net Income would Decrease by 45%

c. Degree of Operating Leverage is 8, and Net Income would Increase by 120%

d. Degree of Operating Leverage is 3, and Net Income would increase by 45%