Sebree Corporation has provided the following contribution format income statement. Assume that the following information is within the relevant range. Sales (7,000 units)$280,000Variable expenses 168,000Contribution margin 112,000Fixed expenses 105,600Net operating income$6,400 Using the degree of operating leverage, the estimated percent increase in net operating income as the result of a 5% increase in sales is closest to:
A. 87.50%
B. 0.11%
C. 218.75%
D. 0.29%
Answer: A
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