Question
A Corporation has provided its contribution format income statement for August. Sales $863,300 Variable expenses 427,200 Contribution margin 436,100 Fixed expenses 352,400 net operating income
A Corporation has provided its contribution format income statement for August. Sales $863,300 Variable expenses 427,200 Contribution margin 436,100 Fixed expenses 352,400 net operating income $83,700 a. Compute the degree of operating leverage to two decimal places. b. Using the degree of operating leverage, estimate the percentage in net operating income that should result from a 14% increase in sales. Required: a. Compute the degree of operating leverage to two decimal places. b. Using the degree of operating leverage, estimate the percentage change in net operating income that should result from a 14% increase in sales.
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