Question
If sales are $525,000, variable costs are 64% of sales, and operating income is $50,000, Calculate the following; a. CM ratio ; b. Degree of
If sales are $525,000, variable costs are 64% of sales, and operating income is $50,000,
Calculate the following;
a. CM ratio ;
b. Degree of operating leverage;
c. The impact of a 20% increase in sales
Step by Step Solution
3.34 Rating (145 Votes )
There are 3 Steps involved in it
Step: 1
Answer Sales 525000 Variable cost 64 of sales a Contribution 525000 x 1064 189000 Contribu...
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started
Fundamentals of corporate finance
Authors: Robert Parrino, David S. Kidwell, Thomas W. Bates
2nd Edition
978-0470933268, 470933267, 470876441, 978-0470876442
