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The DesMaris Company had the following income statement for the month of November 2018: DesMaris Company Income Statement For the Month of November 2018 Sales

The DesMaris Company had the following income statement for the month of November 2018:

DesMaris Company Income Statement For the Month of November 2018

Sales ($60 10,000 units)

$600,000

Cost of goods sold:
Direct materials

$120,000

Direct labor

90,000

Variable factory overhead

75,000

Fixed factory overhead

120,000

405,000

Gross profit

$195,000

Selling and administrative expenses:
Variable

$ 15,000

Fixed

90,000

105,000

Operating income

$ 90,000

If DesMaris Company expects sales revenue to increase by 3%, by approximately what percentage will operating income increase?

a. 20%

b. 6.50%

c. 3.5%

d. 10%

e. 9.23%

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