Question
Sales price per pair of sandals $20 Variable expenses per pair of sandals14' Contribution margin per pair of sandals$6 Fixed expenses per year: Building rental$1,800
Sales price per pair of sandals
$20
Variable expenses per pair of sandals14'
Contribution margin per pair of sandals$6
Fixed expenses per year:
Building rental$1,800
Equipment depreciation
1,800
Selling1,800
Administrative6,600
Total fixed expenses$12,000
During the first year, the store sold only 3,000 pairs of sandals and reported the following operating results:
Sales (3,000 pairs)$60,000
Variable expenses42,000
Contribution margin18,000
Fixed expenses12,000
Net operating income$6,0
Use the degree of operating leverage, what would be the expected percentage increase in net operating income if Angie is able to increase sales by 50%?
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