The degree of operating leverage (DOL) at any given sales volume, X, is useful as:

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The degree of operating leverage (DOL) is a measure of how sensitive the operating income is to a change in sales, which reflects the company's fixed versus variable costs structure. It is used in conjunction with a Cost-Volume-Profit (CVP) analysis to assess the risk associated with achieving sales volumes, making it a measure of risk rather than an alternative measure of breakeven volume, a measure of targeted profit, a way to estimate fixed costs, or a method for performing Monte Carlo Simulation (MCS) analysis.

The Degree of Operating Leverage (DOL) at Any Given Sales