Question
Oslo Company prepared the following contribution format income statement based on a sales volume of 1,000 units (the relevant range of production is 500 units
Oslo Company prepared the following contribution format income statement based on a sales volume of 1,000 units (the relevant range of production is 500 units to 1,500 units): |
Sales | $ | 23,600 |
Variable expenses | 13,200 | |
Contribution margin | 10,400 | |
Fixed expenses | 7,592 | |
Net operating income | $ | 2,808 |
Required: |
Assume that the amounts of the companys total variable expenses and total fixed expenses were reversed. In other words, assume that the total variable expenses are $7,592 and the total fixed expenses are $13,200. Under this scenario and assuming that total sales remain the same, what is the degree of operating leverage? (Round your answer to 2 decimal places.) |
dEgree of operating leverage:
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