Serfass Corporation's contribution format income statement for July appears below. Sales Variable expenses Contribution margin Fixed...

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Serfass Corporations contribution format income statement for July appears below. Sales Variable expenses Contribution margi

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Answer 1

Answer #1

Degree of operating leverage = (sales - variable costs) / [(sales - variable costs) - fixed operating cost]

Degree of operating leverage = ($327,700 - $180,235) / [($327,700 - $180,235) - $66,360]

Degree of operating leverage = $147,465 / $81,105

Degree of operating leverage = 1.8182

Degree of operating leverage = 1.82 (rounded off to '2' decimals)

(or)

Degree of operating leverage = Contribution margin / Net Operating Income

Degree of operating leverage = $147,465 / $81,105

Degree of operating leverage = 1.82

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Answer 2

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Serfass Corporation's contribution format income statement for July appears below: Sales $ 307,800 Variable expenses 153,900...

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Serfass Corporation's contribution format income statement for July appears below: Sales $353,800 Variable expenses 194,590 Contribution...