Tiktok Company distributes a lightweight lawn chair that sell for P150 per unit. Variable costs are P60 per unit, and fixed costs total P1,800,000 annually. Assume that the operating results for last...

Tiktok Company distributes a lightweight lawn chair that sell for P150 per unit. Variable costs are P60 per unit, and fixed costs total P1,800,000 annually. Assume that the operating results for last year were as follows:

Sales...........................P3,600,000

Variable Costs...........................1,440,000

Contribution Margin...........................2,160,000

Fixed Costs...........................1,800,000

Net Operating Income...........................360,000

REQUIRED:

1. 
   Compute the degree of operating leverage based on last year results.
   


2. 
   The president expects sales to increase by 15% next year. By how much should net income increase?