Answer:
26.50%
Explanation:
Note: The full question is attached below
Contribution margin = Sales - Variable expenses
Contribution margin = $31 - $15
Contribution margin = $16
                                           Current          Proposed
Contribution margin         $6,080             $7,296
<em>                                          ($16*380)       (6080*$1.2)</em>
Fixed Cost                         <u>($1,490</u>)            <u>($1,490)</u>
Net operating income      $4,590            $5,806
Increase in profit = ($5,806 - $4,590) / $4,590
Increase in profit = 0.2649237
Increase in profit = 26.50%