The degree of operating leverage is a valuable piece of information. It can be used to quickly determine the impact of a percentage change in sales on operating income. We see that a 40 percent increase in sales can bring a significant benefit to the firm. The effect, however, is a two-edged sword. As sales decrease, the automated system will also show much higher percentage profit decrease. Moreover, the increased operating leverage is available under the automated system because of the presence of increase fixed costs