Refer to the original information (ignoring the changes considered in Short Exercises S20-11 and S20-12). If Playtime Park expects to sell 7,000 tickets, compute the degree of operating leverage. Estimate the operating income if sales increase by 15%.
Playtime Park competes with Water World by providing a variety of rides. Playtime Park sells tickets at $60 per person as a one-day entrance fee. Variable costs are $24 per person, and fixed costs are $226,800 per month.