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

Name: A manufacturer of tiling grout has supplied the following data: The company's degree of operating leverage is closest to:
Brand: Quizplus
Rating: 5.0 (45 reviews)

Question

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

Quizplus · Accepted Answer

Contribution margin = Sales - Variable expenses
= $1, 950, 000 - ($960, 000 + $360, 000)
= $1, 950, 000 - $1, 320, 000 = $630, 000
Degree of operating leverage = Contribution margin ÷ Net operating income
= $630, 000 ÷ $132, 000 = 4.77

A Manufacturer of Tiling Grout Has Supplied the Following Data