Question

Head-First Company plans to sell 5,000 bicycle helmets at $75 each in the coming year. Unit variable cost is $45 (includes direct materials, direct labor, variable factory overhead, and variable selling expense). Total fixed cost equals $49,500 (includes fixed factory overhead and fixed selling and administrative expense). Operating income at 5,000 units sold is $100,500.

Required:
Calculate the degree of operating leverage. (Note: Round answer to the nearest tenth.)


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  • CreatedSeptember 22, 2015
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