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AU Exercise Company is interested in the effects of its cost structure on profitability.
You have learned that for the current period AU's fixed costs are equal to the last four digits of your AU ID # in $ and its operating income is equal to the first three digits of your AU ID # in $.
Question A. What is AU Exercise Company's operating leverage? Round your answer to two decimal places, e.g., 4.67. Show your work in determining operating leverage.
Question B. If AU Exercise Company's sales decrease by 15%, by what percent would would its operating income change? Round your answer to three decimal places, e.g., 5.83%. Show your work in determining the percentage change in operating income.
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