Learning Objective 20.5 E20-35 Computing degree of operat- ing leverage Following is the income statement for Marrow Mufflers for the month of June 2018: MARROW MUFFLERS Contribution Margin Income Statement Month Ended June 30, 2018 Net Sales Revenue (140 units X $250) 35,000 Variable Costs (140 units x $50) Contribution Margin Fixed Costs Operating Income 7,000 28,000 11,500 16,500 Requirements 1. Calculate the degree of operating leverage. (Round to four decimal places.) 2. Use the degree of operat- ing leverage calculated in Requirement 1 to estimate the change in operating income if total sales in- crease by 40% (assuming no change in sales price per unit). (Round interim calculations to four deci mal places and final an- swer to the nearest dollar.) 67.8800% 3. Verify your answer in Re- quirement 2 by preparing a contribution margin in come statement with the total sales increase of 40%