Bic Corporation's contribution format income statement for the most recent month follows:

Sales	$121,000
Variable Expenses	60,500
Contributon Margin	60,500
Fixed Expenses	43,700
Net Operating Income	$16,800

Required:

a. Compute the degree of operating leverage to two decimal places.

b. Using the degree of operating leverage, estimate the percentage change in net operating income that should result from an 8% increase in sales. Prove your answer by preparing a new contribution format income statement, showing the new net operating income after the increase in sales.