Final answer:
The question asks how to find new sales given a change in profits and the degree of operating leverage. To solve this, one would typically calculate the percentage change in sales due to a change in profits and then apply it to the original sales amount using the degree of operating leverage. However, without more data such as fixed costs or contribution margin, we cannot compute the new sales amount.
Step-by-step explanation:
The question is regarding the calculation of new sales when profits change given the degree of operating leverage. If the sheep farm under normal economic conditions has a profit of 1.9 million on sales of 5.7 million and a degree of operating leverage (DOL) of 6.2, we can calculate the effect of a change in profit on sales. The DOL indicates how profit will change with a percentage change in sales. If profits are instead 2.3 million, we can set up the equation 2.3 million = 1.9 million + (DOL * 1.9 million * percentage change in sales). After calculating the percentage change in sales, we can then find the new sales amount.
However, without additional information such as fixed costs or contribution margin, which are needed to accurately determine the relationship between the change in sales and the change in profits, this problem cannot be precisely solved.