Tyrene Products manufactures recreational equipment. One of the company's products, a skateboard, sells for $35. The skateboards are manufactured in an antiquated plant that relies heavily on direct labour workers. Thus, variable costs are high, totalling $21.00 per skateboard, of which 60% is direct labour cost.

     Over the past year the company sold 41,000 skateboards, with the following operating results: 

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Sales (41,000 skateboards) $1,435,000 Variable expenses 861,000Contribution margin 574,000Fixed expenses 420,000 Net operating income $ 154,000 b-1.Assume that the new plant is constructed and that next year the company manufactures and sells41,000 skateboards (the same number as sold last year). Prepare a contribution format incomestatement. (Input all amounts as positive values except losses which should be indicated byminus sign. ) Contribution margin 832,300Net operating income (loss) $ 412,300 [2)- Compute the degree of operating leverage. (Round your answer to 2 decimal places.)