U.S. Steal has the following income statement data:

a. Compute DOL based on the following formula:

b. Confirm that your answer to part a is correct by recomputing DOL using Formula 5 – 3. There may be a slight difference due to rounding.

Q represents beginning units sold (all calculations should be done at this level).
P can be found by dividing total revenue by units sold.
VC can be found by dividing total variable costs by units sold.

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Units Sold 60,000 80,000 Total Variable Costs $ 120,000 160,000 Fixed Costs $50,000 50,000 Total Costs $170,000 210,000 Total Revenue $360,000 480,000 Operating Income (Loss) $190,000 270,000