3. Pablo Escobar has recently opened The Sandal Shop in Brisbane, Australia, a store that specializes in fashionable sandals. Pablo has just received a degree in business and she is anxious to apply the principles she has learned to her business. In time, she hopes to open a chain of sandal shops. As a first step, she has prepared the following analysis for her new store: 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. $40 16 $24 $15,000 7,000 20,000 18,000 $60,000 Refer to the original data. During the first year, the store sold only 3,000 pairs of sandals and reported the following operating results: Sales (3,000 pairs). Variable expenses. Contribution margin. Fixed expenses.. Net operating income. . $120,000 48,000 72,000 .60,000 $ 12,000 a) What is the store's degree of operating leverage? b) Pablo is confident that with a more intense sales effort and with a more creative advertising program she can increase sales by 50% next year. What would be the expected percentage increase in net operating income? Use the degree of operating leverage to compute your answer.