Goodman Corporation has sales volumes of 3,000 units at $80 per unit. Variable costs are 35% of the sales price. If total fixed costs are $66,000, the degree of operating leverage is:

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The degree of operating leverage (DOL) is calculated as: DOL = Contribution Margin / Net Operating Income. Contribution Margin per unit = Sales price - Variable cost per unit = $80 - ($80 * 0.35) = $52. Total Contribution Margin = 3,000 units * $52 = $156,000. Net Operating Income = Total Contribution Margin - Fixed Costs = $156,000 - $66,000 = $90,000. DOL = $156,000 / $90,000 = 1.73.

Goodman Corporation Has Sales Volumes of 3,000 Units at $80