A manufacturer of cedar shingles has supplied the following data: The company's degree of operating leverage is closest to:

Name: A manufacturer of cedar shingles has supplied the following data: The company's degree of operating leverage is closest to:
Brand: Quizplus
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Question

A manufacturer of cedar shingles has supplied the following data:  The company's degree of operating leverage is closest to:

Quizplus · Accepted Answer

Contribution margin = Sales - Variable expenses
= $2,412,000 - ($1,170,000 + $414,000)
= $2,412,000 - $1,584,000 = $828,000
Degree of operating leverage = Contribution margin ÷ Net operating income
= $828,000 ÷ $32,000
= 25.88

A Manufacturer of Cedar Shingles Has Supplied the Following Data