Barton Beverages Inc. sells cases of bottled water at $25 each and has variable costs of $10 for each case of water. Fixed costs per month are $30,000, and the accountants at Barton have reported to management that operating income last month was $3,375.
a. What is Barton's current degree of operating leverage (DOL)? (Round to 2 decimal places)
b. If Barton is able to reduce its fixed costs by $3,000 per month, what is its new DOL? (Round to 3 decimal places)

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The Answer of Barton Beverages Inc. sells cases of bottled water at $25 each and has variable costs of $10 for each case of water. Fixed costs per month are $30,000, and the accountants at Barton have reported to management that operating income last month was $3,375.
a. What is Barton's current degree of operating leverage (DOL)? (Round to 2 decimal places)
b. If Barton is able to reduce its fixed costs by $3,000 per month, what is its new DOL? (Round to 3 decimal places)