Lofft Corporation has provided the following contribution format income statement. Assume that the following information is within the relevant range.

Sales (2,000 units)	$	120,000
Variable expenses		90,000
Contribution margin		30,000
Fixed expenses		16,500
Net operating income	$	13,500

Using the degree of operating leverage, the estimated percent increase in net operating income as the result of a 10% increase in sales is closest to:

		1.13%
		88.89%
		22.22%
		4.50%