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

SALES	234,000
VARIABLE EXPENSE	93,000
CONTRIBUTION MARGIN	141,000
FIXED EXPENSES	109,200
NET OPERATING INCOME	31,800

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 a 1% increase in sales.