14

Company A is a manufacturer with current sales of $3,400,000 and a 60% contribution margin. Its fixed costs equal $1,600,000 Company B is a consulting firm with current service revenues of $3,500,000 and a 25% contribution margin. Its fixed costs equal $410,000 Compute the degree of operating leverage(DOL) for each company Contribution Margin Income Statement Company A Company B Choose: Numerator Denominator Ratio Degree of Operating Leverage Company A Company B