Question
The Chokolate Shop has an operating profit of $24,000. a) Calculate the degree of operating leverage for each of the independent cases (assuming operating profit
The Chokolate Shop has an operating profit of $24,000.
a) Calculate the degree of operating leverage for each of the independent cases (assuming operating profit is held constant): i. Contribution Margin is $55,000. ii. CM ratio is 49% and revenue is $149,000. iii. Selling price per unit is $36, variable costs per unit are $14 and it sold 4,200 units. Do not enter dollar signs or commas in the input boxes. Round contribution margin and operating income to the nearest whole number. Round the degree of operating leverage to 2 decimal places.
Contribution Margin | Operating Profit | Degree of Operating Leverage | |
i. | $Answer | $Answer | Answer |
ii. | $Answer | $Answer | Answer |
iii. | $Answer | $Answer | Answer |
b) Which scenario has the largest degree of operating leverage? Scenario: Answeriiiiii
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