Answered step by step
Verified Expert Solution
Question
1 Approved Answer
Sales (100,000 units) $ 1,000,000 Variable costs 300,000 Contribution margin 700,000 Fixed manufacturing cost 200,000 Operating income 500,000 Interest 75,000 Earnings before taxes 425,000 Taxes
Sales (100,000 units) $ 1,000,000 Variable costs 300,000 Contribution margin 700,000 Fixed manufacturing cost 200,000 Operating income 500,000 Interest 75,000 Earnings before taxes 425,000 Taxes (30%) 127,500 Net Income $ 297,500 Refer to the figure above. The Degree of Operating Leverage is A. 1.40x B. 1.56x C. 3.33x D. 2.22x
Step by Step Solution
There are 3 Steps involved in it
Step: 1
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