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Crowders Quilts Income Statement For 2005 Sales Revenue (250 @ $600 per unit) Cost of Goods Sold: Variable (250 @ $300 per u
17. Food The magnitude of Crowders operating leverage is approximately (round to nearest hundredth): 1.09. 1.15. 0.87 1.22.
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Answer #1

Calculation of operating leverage:

Operating leverage= Contribution/operating income

Contribution= sales-variable cost= 150000-75000-5000= 70000

Operating income= 61000

Operating leverage= 70000/61000= 1.15

So correct answer is b) 1.15

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