In: Accounting
Alberts Enterprises has sales of 3,000 units at $80 per unit. Variable costs are 35% of the sales price. If total fixed costs are $66,000, what is the the degree of operating leverage?
Degree of operating leverage | = | 1.73 |
Sales(3000*80) | 240,000.00 |
Variable costs(35%) | 84,000.00 |
Contribution Margin | 156,000.00 |
Fixed Cost | 66,000.00 |
Operating income |
90,000.00 |
Degree of operating leverage | = | Contribution Margin | / | Operating income |
Degree of operating leverage | = | 156,000.00 | / | 90,000.00 |
Degree of operating leverage | = | 1.73 |
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