Question 1 1 pts For questions 1 - 5 use the following information: Jitterbug Incorporated manufactures and sells a single product. The company's contribution format income statement projection for its next year of operations is: Jitterbug Incorporated: Upcoming year projections Per Unit Sales Revenue: 40,000 units sold $800,000 $20 Less: Variable Expenses -640.000 -16 Contribution Margin 160,000 $4 Less: Fixed Expenses -80,000 Net Operating Income $ 80.000 1. What is the company's degree of operating leverage based on its projections? 4 $80,000.00 O 1 02 2. Applying the degree of operating leverage concept: how much will net operating income change as a percentage, if sales are 10% greater than projected? Fixed expenses will remain in the relevant range. plus 20% minus 15% 10% x 1 = 10% 10% X 2 = plus 20% 3. Does the company have a good cost structure if sales should exceed its projections by 10%? Explain. No, because its degree of operating leverage is fairly low. Yes, because its degree of operating leverage is fairly high. Yes, because its degree of operating leverage is fairly low. No, because its degree of operating leverage is fairly high. 4. Applying the degree of operating leverage concept: how much will net operating income change as a percentage, if sales are 8% less than projected? Fixed expenses will remain in the relevant range. minus 8% minus 16% -8% X 2 = minus 16% 8% X 2 = plus 16% 5. Does the company have a good cost structure if sales are 8% less than what it has projected? Yes, because its degree of operating leverage is fairly low. No, because its degree of operating leverage is fairly low. No, because its degree of operating leverage is fairly high. Yes, because its degree of operating leverage is fairly high