Daley Co.manufactures computer monitors.Following is a summary of its basic cost and revenue data: Assume that Daley Co.is currently selling 700 computer monitors per month.Fixed costs are expected to be $96,000.
Required:
1.Calculate Daley Co.'s degree of operating leverage (DOL) if 700 units are sold.Round your answer to 3 decimal places.
2.Define what is meant by the DOL.
3.Of what purpose/value is the DOL to decision makers?

Question

Daley Co.manufactures computer monitors.Following is a summary of its basic cost and revenue data:  Assume that Daley Co.is currently selling 700 computer monitors per month.Fixed costs are expected to be $96,000.
Required:
1.Calculate Daley Co.'s degree of operating leverage (DOL) if 700 units are sold.Round your answer to 3 decimal places.
2.Define what is meant by the DOL.
3.Of what purpose/value is the DOL to decision makers?

Quizplus · Accepted Answer

The Answer of Daley Co.manufactures computer monitors.Following is a summary of its basic cost and revenue data:  Assume that Daley Co.is currently selling 700 computer monitors per month.Fixed costs are expected to be $96,000.
Required:
1.Calculate Daley Co.'s degree of operating leverage (DOL) if 700 units are sold.Round your answer to 3 decimal places.
2.Define what is meant by the DOL.
3.Of what purpose/value is the DOL to decision makers?

Daley CoManufactures Computer Monitors