2. Labor-intensive manufacturing method. x units (b) Determine the annual unit volume at which Paper Mate is indifferent between the two manufacturing methods. x units (c) Management wants to know more about the effect of each alternative on operating leverage. 1. Explain operating leverage and the relationship between operating leverage and the volatility of earnings. OThey have little or no correlation because they are unrelated. They are positively correlated, with increases in operating leverage accompanied by increases in the volatility of earnings. OThey are negatively correlated, with increases in operating leverage accompanied by decreases in the volatility of earnings. 2. Compute operating leverage for each alternative at a volume of 220,000 units. Round your answers two decimal places. Capital-Intensive operating leverage x Labor-Intensive operating leverage x