Outback Products reports the following information:
Total Contribution Margin…………………..$32,000
Total Fixed Costs…………………………….$28,000
Required:
(a)Calculate Outback Products' degree of operating leverage (DOL).
(b)Outback Products forecasts a 6% increase in sales.What is the expected effect in percent on pretax income?

Question

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The Answer of Outback Products reports the following information:
Total Contribution Margin…………………..$32,000
Total Fixed Costs…………………………….$28,000
Required:
(a)Calculate Outback Products' degree of operating leverage (DOL).
(b)Outback Products forecasts a 6% increase in sales.What is the expected effect in percent on pretax income?

Outback Products Reports the Following Information