Bangle most recently sold 100,000 units at $7.50 each; its variable operating costs are $3.00 per unit, and its fixed operating costs are $250,000. Annual interest charges total $80,000, and the firm has 8,000 shares of $5 (annual dividend) preferred stock outstanding. It currently has 20,000 shares of common stock outstanding. Assume that the firm is subject to a 40% tax rate.

Use the DTL concept to determine the effect (in percentage terms) of a 50% increase in Bangles sales from the $750,000 base level on its earnings per share.