Question
Company A is a manufacturer with current sales of $4,000,000 and a 60% contribution margin. Its fixed costs equal $1,800,000. Company B is a consulting
Company A is a manufacturer with current sales of $4,000,000 and a 60% contribution margin. Its fixed costs equal $1,800,000. Company B is a consulting firm with current service revenues of $3,900,000 and a 25% contribution margin. Its fixed costs equal $400,000.
Compute the degree of operating leverage (DOL) for each company.
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Accounting Information Systems
Authors: Pat Wheeler, Ulric J Gelinas, Richard B Dull
9th Edition
0538469315, 9780538469319
