Homework Answers
| Opearting Levreage Factor = Contribution/Profit | |||||
| At target opearting income of $ 4,000 | |||||
| Fixed Cost = 24,000 | |||||
| Rquired Contribution = 24,000 + 4,000 = 28,000 | |||||
| Variable Cost = 20% | |||||
| Contribution = 80% | |||||
| Sales to achieve target profit = 28,000/80% | 35000 | ||||
| Opearting Levarge Factor = 28000/4000= | 7 | ||||
| Answer : Option C |
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