Laramie Corporations income statement is presented below: Sales ........ $40,000 Less variable costs .. -28,000 Contribution margin
Question:
Laramie Corporation’s income statement is presented below:
Sales ........ $40,000
Less variable costs .. -28,000
Contribution margin . $12,000
Less fixed costs ..... -8,000
Net Income ..... $ 4,000
What is Laramie’s operating leverage?
Contribution MarginContribution margin is an important element of cost volume profit analysis that managers carry out to assess the maximum number of units that are required to be at the breakeven point. Contribution margin is the profit before fixed cost and taxes...
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