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Porter Productions sells video tapes for $15.00 each. Their variable cost per unit is $9.00. In addition, they incur $180,000 in fixed costs each year.

Porter Productions sells video tapes for $15.00 each. Their variable cost per unit is $9.00. In addition, they incur $180,000 in fixed costs each year. At 40,000 units of sale, what is Porter's degree of operating leverage (DOL)?

a. 1.33

b. 3.00

c. 6.00

d. 4.00

e. 2.50

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