Lofft Corporation has provided the following contribution format income statement. Assume that the following information is within the relevant range. Sales (2,000 units)$120,000Variable expenses 90,000Contribution margin 30,000Fixed expenses 16,500Net 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:
A. 4.50%
B. 1.13%
C. 22.22%
D. 88.89%
Answer: C
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