Degree of Operating Leverage Head-First Company plans to sell 5,000 bicycle helmets at $75 each in...

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Degree of Operating Leverage Head-First Company plans to sell 5,000 bicycle helmets at $75 each in the coming year. Unit vari

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Answer 1

Answer #1

Sales = 75*5000 = 375000 $

Variable cost = 51*5000 = 255000$

Contribution margin = sales- Variable cost

= 375000-255000

= 120000

Degree of Operating Leverage = Contribution margin/Operating Income

= 120000/70500

= 1.70

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Answer 2

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