Oslo Company prepared the following contribution format income statement based on a sales volume of 1,000 units
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Question:
Oslo Company prepared the following contribution format income statement based on a sales volume of 1,000 units (the relevant range of production is 500 units to 1,500 units):
Sales | $ 25,000 |
---|---|
Variable expenses | 17,500 |
Contribution margin | 7,500 |
Fixed expenses | 4,200 |
Net operating income | $ 3,300 |
14. Assume that the amounts of the company's total variable expenses and total fixed expenses were reversed. In other words, assume that the total variable expenses are $4,200 and the total fixed expenses are $17,500. Under this scenario and assuming that total sales remain the same, what is the degree of operating leverage? (Round your answer to 2 decimal places.)
Related Book For
Managerial Accounting
ISBN: 9781260193275
12th Canadian Edition
Authors: Ray H. Garrison, Alan Webb, Theresa Libby
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