11. If the contribution margin ratio is 0.40, targeted operating income is $80,000, and targeted sales volume in dollars is $500,000, then the degree of operating leverage is: A) 1.50 times B) 2.00 times C) 2.50 times D) 3.00 times
The correct option is C
Degree of operating leverage = Contribution margin ratio / operating margin
Operating margin = operating income / net sales
= 80000 / 500000
= 0.16
Therefore Degree of operating leverage = 0.40 / 0.16
= 2.5 times
11. If the contribution margin ratio is 0.40, targeted operating income is $80,000, and targeted sales...
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