What percentage will the companys profit increase

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Question: A company sells one model of a synthetic leather basketball. The basketballs sell for $20 each, and the variable expenses for each basketball are $14. The company has $1,200 of fixed expenses. The company sold 600 basketballs last year. Based on this data from last year, the company's degree of operating leverage is 1.5. Assume that the fixed expenses, selling price and variable expense per basketball remain the same. Using the degree of operating leverage, by what percentage will the company's profit increase if its sales revenue increases by 40%?

Reference no: EM133659627

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