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Best Windows is a small company that installs windows. Its cost structure is as follows: (Click the icon to view the cost structure.) Best is
Best Windows is a small company that installs windows. Its cost structure is as follows: (Click the icon to view the cost structure.) Best is considering changing its sales compensation for next year. Best would pay salespeople a 6% commission next year and reduce fixed selling costs by $66,000. Calculate the degree of operating leverage at sales of 7,500 units under the two options. Comment briefly on the result. Begin by selecting the labels for the degree of operating leverage formula. Next, complete the following table in order to calculate the degree of operating leverage. (Round the degree of operating leverage to two decimal places.) Comment briefly on the result. (Enter the amounts to two decimal places.) These results indicate that, when sales are 7.500 units, a 1\% change in sales and contribution margin will result in a % change in operating income for Option 1. For Option 2, a 1% change in sales and contribution margin will result in a % change in operating income. Data table
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