If the contribution margin ratio is 0.60, targeted operating income is $100,000, and targeted sales volume...

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If the contribution margin ratio is 0.60, targeted operating income is $100,000, and targeted sales volume...

If the contribution margin ratio is 0.60, targeted operating income is $100,000, and targeted sales volume in dollars is $500,000, then the degree of operating leverage is ________.

		3.00 times
		0.67 times
		0.33 times
		2.00 times

business accounting

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Answer 1

Answer #1

Contribution margin

= 500,000 * 0.60 = 300,000

Operating income = 100,000

Degree of operating leverage = Contribution margin/Operating income

= 300,000/100,000

= 3 times

Option A is the answer

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Answer 2

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