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Company A is a manufacturer with current sales of $3,300,000 and a 60% contribution margin. Its fixed costs equal $1,450,000. Company B is a consulting
Company A is a manufacturer with current sales of $3,300,000 and a 60% contribution margin. Its fixed costs equal $1,450,000. Company B is a consulting firm with current service revenues of $3,200,000 and a 30% contribution margin. Its fixed costs equal $460,000 Compute the degree of operating leverage (DOL) for each company. Contribution Margin Income Statement Company A Company B Degree of Operating Leverage Numerator Denominator Choose: Ratio Degree of Operating Leverage ! 0 Company A Company B 0
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