Question
Company A is a manufacturer with current sales of $6,000,000 and 60% contribution margin. Its fixed costs equal $2,600,000. Company B is a consulting firm
Company A is a manufacturer with current sales of $6,000,000 and 60% contribution margin. Its fixed costs equal $2,600,000. Company B is a consulting firm with current service revenues of $4,500,000 and a 25% contribution margin. Its fixed costs equal $375,000. Compute the degree of operating leverage (DOL) for each company.
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Financial Accounting A User Perspective
Authors: Robert E. Hoskin, Maureen R. Fizzell, Donald C. Cherry
4th Canadian Edition
0470834455, 978-0470834459
