Homework Answers
Answer:
option A) correct. i.e $52,000
| Degree of Operating Leverage Is: |
|
=% change in operating income (EBIT )/ %change in sales |
| 3 = % change in operating income (EBIT ) /10% |
| % change in operating income (EBIT )= 10%*3 |
| % change in operating income (EBIT )= 30% |
| New operating income =$40,000+(40,000*.30) |
| = $ 52,000 |
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