Answer:
degree of operating leverage 6.04
Income if sales increase by 10%: 72,180
Explanation:
degree of operating leverage:
[tex]\frac{contribution}{profit}[/tex]
contribution per ticket
60 sales price - 24 variable cost = 36 dollars
36 x 7,550 = 271,800 total contribution
fixed cost (226,800)
profit 45,000
[tex]\frac{271,800}{45,000}[/tex]
degree of operating leverage: 6.04
the sales have a multiplier effect of 6.04
a 10 percent increase on sales translates to 60.4 percent in the net operating income:
income with a 10% sales:
45,000 x ( 1 + 60.4%) = 72.180