Homework Answers
Required:
DOL = Contribution / EBIT
= $6,000 / $2,880
= 2.08 times
Now,
DOL = %change in EBIT / %change in sales
2.08 = %change in EBIT / 5%
%change in EBIT = 5 * 2.08
%change in EBIT = 10.4%
Thus, Increase in net operating income = 10.4%
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