Question: Suppose Kay sells 1,000 posters. Use the data from S4-13 to compute her operating leverage factor. If sales volume increases 10%, by what percentage will

Suppose Kay sells 1,000 posters. Use the data from S4-13 to compute her operating leverage factor. If sales volume increases 10%, by what percentage will her operating income change? Prove your answer.

Data in S4-13

Kay has an e-tail poster business. Suppose Kay expects to sell 1,000 posters. Her average sales price per poster is $30 and her average cost per poster is $24. Her fixed expenses total $3,600. Compute her margin of safety .

Check sum: Operating leverage is 2.5.

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