Question

14. Assume that the amounts of the company's total variable expenses and total found expenses were reversed in the words that the variable Under this scenario and assuming that total sales remain the same, what is the degree of operating leverage Round your answer to decimal places s and the fede r Required Information The rows 10 medew References eBook & Resources on ONO Conny prepared the following coton format income of 1000 units relevant range of productions 500 units 500 Worksheet Learning Objective 03 margin ratio (CM ) contribution magn and resulting from changes 175,00 Difficulty: 2 Medium Learning Objective: not operating income costs, fixed costs, so Vares Combaton margin Netoperating income Learning Objective: 03 even point Learning Objective: 03.01 Explain how changes in activity affect contribution margin and net operating income Check my work MS 2012

Answer 1

Particular	Amount
Sales	$25,700
Less : Variable cost	(7,788)
Contribution margin	17,912
Less : Fixed cost	(13,900)
Net Operating income	4,012.

Degree of operating leverage = (Contribution Margin ÷ Net operating income)

=> $ 17,912 ÷ 4,012 = 4.64 times.