3-13

Oslo Company prepared the following contribution format income statement based on a sales volume of 1,000 units (the relevant range of production is 500 units to 1,500 units):

Sales	$	80,000
Variable expenses		52,000
Contribution margin		28,000
Fixed expenses		21,840
Net operating income	$	6,160

Using the degree of operating leverage, what is the estimated percent increase in net operating income of a 5% increase in sales? (Round your intermediate calculations and final answer to 2 decimal places.)