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Estimate the percentage change in net operating income

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Reference no: EM133046167

Problem - In the most recent year, Flamino Corporation's total sales revenue was $400,000 and the total variable cost was $315,200 and its net operating income of $21,200.

Required -

a. Compute the degree of operating leverage.

b. Using the degree of operating leverage, estimate the percentage change in net operating income that should result from a 10% increase in sales.

Reference no: EM133046167

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