A manufacturer of premium wire strippers has supplied the following data: The company's degree of operating leverage is closest to:

Name: A manufacturer of premium wire strippers has supplied the following data: The company's degree of operating leverage is closest to:
Brand: Quizplus
Rating: 4.9 (55 reviews)

Question

A manufacturer of premium wire strippers has supplied the following data:  The company's degree of operating leverage is closest to:

Quizplus · Accepted Answer

Contribution margin = Sales - Variable expenses
= $2,448,000 - ($1,258,000 + $306,000)
= $2,448,000 - $1,564,000 = $884,000
Degree of operating leverage = Contribution margin ÷ Net operating income
= $884,000 ÷ $44,000 = 20.09

A Manufacturer of Premium Wire Strippers Has Supplied the Following