Modern Artifacts can produce keepsakes that will be sold for $240 each. Nondepreciation fixed costs are $3,600 per year, and variable costs are $140 per unit. The initial investment of $10,800 will be depreciated straight-line over its useful life of 3 years to a final value of zero, and the discount rate is 8%.
What is the degree of operating leverage of Modern Artifacts when sales are $17,760?
What is the degree of operating leverage when sales are $35,280?