The Dabeth Company has Sales of $750,000, variable costs of $500,000, and Fixed costs of $187,500....

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The Dabeth Company has Sales of $750,000, variable costs of $500,000, and Fixed costs of $187,500....

The Dabeth Company has Sales of $750,000, variable costs of $500,000, and Fixed costs of $187,500. Determine the company's operating leverage.

		7.5
		4.0
		2.5
		6.0

business accounting

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Answer 1

Answer #1

Sales	$750,000
Variable costs	$(500,000)
Contribution margin	$250,000
Fixed costs	$(187,500)
Operating income	$62,500

Operating leverage = Contribution margin / Operating income

= $250,000 / $62,500

= 4.0

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Answer 2

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The Dabeth Company has Sales of $750,000, variable costs of $500,000, and Fixed costs of $187,500....

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