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The following information is extracted from the income statement of Al Shams Private Ltd. The Price (P) per unit of product is OMR 12 and
The following information is extracted from the income statement of Al Shams Private Ltd. The Price (P) per unit of product is OMR 12 and Variable cost (VC) per unit is OMR 7 and fixed operating cost is OMR 8,000.Answer the following question after analyzing the given table. YEAR 1 YEAR 2 5,000 9,500 Sales (in units) ? ? Sales Revenue (in OMR) Less: Variable operating costs ? ? . Less: Fixed operating costs 8,000 2 Earnings before interest and taxes (EBIT) ? ? a. Complete the table b. Calculate the Degree of Operating Leverage (DOL). c. Interpret your answer (DOL)
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