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Exercise 18-24 Operating leverage computed and applied LO A2 Company A is a manufacturer with current sales of $3,100,000 and a 60% contribution margin. Its
Exercise 18-24 Operating leverage computed and applied LO A2
Company A is a manufacturer with current sales of $3,100,000 and a 60% contribution margin. Its fixed costs equal $1,390,000. Company B is a consulting firm with current service revenues of $3,200,000 and a 20% contribution margin. Its fixed costs equal $150,000.
Compute the degree of operating leverage (DOL) for each company.
Contribution Margin Income Statement Company A Company B Degree of Operating Leverage 1 Denominator = Choose Numerator Ratio Degree of Operating Leverage Company A Company BStep by Step Solution
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