Chapter 16, Problem 7CE

1.

To determine

Compute the degree of operating leverage for both the processes.

2.

To determine

Compute the increase in operating income for each process and what the increase will be and the total operating income for each process.

3.

To determine

Compute the increase in operating income for each process and what the increase will be and the total operating income for each process if the unit sales are reduced by 10%.