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6. Suppose Kari sells 1,800 posters. Use the following financial data ($36 sales price, $28 variable cost, $4,320 fixed expenses) to compute her operating
6. Suppose Kari sells 1,800 posters. Use the following financial data ($36 sales price, $28 variable cost, $4,320 fixed expenses) to compute her operating leverage factor. If sales volume increases 10%, by what percent will Kari's operating income change? Prove your answer. First, identify the formula, then compute the operating leverage factor. (Round your answer to two decimal places.) Contribution margin 1 Operating income Operating leverage factor If sales volume increases 10%, by what percent will Kari's operating income change? (Round the percentage change to one decimal place, X.X%) Operating income will increase by %. Prove your answer. (Round the percentage change to one decimal place, X.X%) Original volume (posters) Add: Increase in volume New volume (posters) Multiplied by: Unit contribution margin New total contribution margin Less: Fixed expenses New operating income Less: Operating income before change in volume Increase in operating income Percentage change %
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