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Sales (100,000 units) Variable costs Contribution margin Fixed manufacturing costs Operating income Interest Earnings before
Sales (1,000 units) Variable costs Contribution margin Fixed manufacturing costs Operating income Interest Earnings before ta
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Answer #1

Degree of operating leverage = Contribution MArgin / operating income =

1) Operating Leverage = 700,000 /500,000= 1.40

2)Operating Leverage = 90,000 /50,000= 1.80

Answers :

D) 1.40X

D) 1.80 X

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