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: 4.9 (58 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