Outback Products Reports the Following Information $$\begin{array} { l l } \text { Total contribution margin} & \$ 32,000 \\\text { Total fixed costs } & \$ 28,000\end{array}$$

Essay

Outback Products reports the following information:
$$\begin{array} { l l } \text { Total contribution margin} & \$ 32,000 \\\text { Total fixed costs } & \$ 28,000\end{array}$$
Required:
a.Calculate Outback Products' degree of operating leverage (DOL).
b.Outback Products forecasts a 6% increase in sales.What is the expected effect in percent on pretax income?