Problem $10-19$ Operating Leverage $($LO$4)$

Modern Artifacts can produce keepsakes that will be sold for $$30$ each. Nondepreclation fixed costs are $$400$ per year, and varlable costs are $$20$ per unit. The initial investment of $$1,200$ will be depreclated stralght$-$line over its useful life of $10$ years to a final value of zero, and the discount rate is $8\%.$

a$.$ What is the degree of operating leverage of Modern Artfacts when sales are $$1,620?$

Note: Do not round Intermedlate calculatlons. Round your answer to $2$ decimal places.

Degree of operating leverage

b$.$ What is the degree of operating leverage when sales are $$2,760?$

Note: Do not round Intermedlate calculatlons. Round your answer to $2$ decimal places.

Degree of operating leverage

c$.$ Why Is operating leverage different at these two levels of sales?

Degree of operating leverage is

when profits are