mary smith sells gourmet chocolate chip cookies the results of her last month of ope 613980

Mary Smith sells gourmet chocolate chip cookies. The results of her last month of operations are as follows:

Sales revenue

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$50,000

Cost of goods sold (all variable)

26,000

Gross margin

24,000

Selling expenses (20% variable)

8,000

Administrative expenses (60% variable)

12,000

Operating income

$ 4,000

Required

  1. What is Mary”s degree of operating leverage?
  2. If Mary can increase sales by 10%, by how much will her operating income increase?
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