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Impact of Increased Sales on Operating Income Using the Degree of Operating Leverage Head-Finst Company had planned to seli 5,000 bicyde helmets at $71 each

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Impact of Increased Sales on Operating Income Using the Degree of Operating Leverage Head-Finst Company had planned to seli 5,000 bicyde helmets at $71 each in the coming year. Unit variable cost is $53 (includes direct materials, direct labor, variable factory overhead, and variable selling expense), Total foed cost equals $49,500 (includes foxed factory overhead and foxed selling and administrative expense). Operating income at 5 , 006 units sbid is $40,500. The degree of operating leverage is 2.2 . Now Head-first expects to increase sales by 10% next year. Required: 1. Calculate the percent change in operating income expected. 2. Calculate the operating income expected next year using the percent change in operating income calculated in Requirement 1

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