Hi! I need an answer on #4 of attached problem.

4. What is the Degree of Operating Leverage? Comment on the DOL and how it improved profitability

over 2010-2012?

Background: PACCAR Inc (PACCAR) is engaged in the design, manufacture and customer support of light, medium- and heavy-duty trucks under the Kenworth, Peterbilt and DAF nameplates. The company also provides customized financial services, information technology and truck parts related to its principal business. The Company operates in three segments: design, manufacture and distribution of light-, medium- and heavyduty trucks, distribution of parts for the truck aftermarket and related commercial vehicles, and finance and leasing products and services provided to customers and dealers. The Company's finance and leasing activities are principally related to Company products and associated equipment. Problem: $ in millions Revenue COGs R&D SG&A Other Trucks EBIT Trucks Depreciation Expense $ $ $ $ $ $ 2012 15,952 (13,908) (279) (476) 0 1,288 140,400 $189.9 $ $ $ $ $ $ 2011 15,326 (13,342) (288) (453) (11) 1,232 138,000 $ $ $ $ $ $ 2010 9,325 8,199 (239) (393) (9) 486 78,800 $196.5 Calculate for FY 2012 only: 1. Estimate the average Selling price and average COGS per unit [Please refer to 10-K for add'l details on COGS and depreciation expense] LINK to 10K: http://www.sec.gov/Archives/edgar/data/75362/000119312513080215/0001193125-13080215-index.htm 2. Estimate the contribution margin per truck. Please refer to the full set of financials below to identify all \"non-cash\" and non-recurring charges. Additionally, please be sure to consider both manufacturing and non-manufacturing costs. For example, sales commissions are variable costs relative to revenue, so should you bake in part of the selling expense? 3. What is the \"break-even\" quantity per truck? 4. What is the Degree of Operating Leverage? Comment on the DOL and how it improved profitability over 2010-2012