Week 7 Homework Saved Help Save & Exit Subm Check my work 4 Angie Silva has recently opened The Sandal Shop in Brisbane, Australia, a store that specializes in fashionable sandals. In time, she hopes to open a chain of sandal shops. As a first step, she has gathered the following data for her new store: Part 3 of 3 $ 40 20 20 $ 3 points Sales price per pair of sandals Variable expenses per pair of sandals Contribution margin per pair of sandals Fixed expenses per year: Building rental Equipment depreciation Selling Administrative Total fixed expenses $ 10,000 8,000 8, Bee 14,000 $ 40,000 etlook 5. Refer to the original data. During the first year, the store sold results: References 2,500 of sandals and reported the following operating Sales (2,500 pairs) Variable expenses Contribution margin Fixed expenses Net operating incone $100,000 50,000 50,000 40.000 $ 10,000 a. What is the store's degree of operating leverage? b. Angie is confident that with a more intense sales effort and with a more creative advertising program she can increase unit sales by 50% next year. Using the degree of operating leverage, what would be the expected percentage increase in net operating income if Angie is able to increase unit sales by 50%? a. Degree of operating leverage b. Expected percentage increase in net operating income % Mc Gr HII