# Question

U.S. Steal has the following income statement data:

a. Compute DOL based on the following formula:

b. Confirm that your answer to part a is correct by recomputing DOL using Formula 5–3. There may be a slight difference due to rounding.

DOL = Q (P – VC) / Q(P – VC) – FC

Q represents beginning units sold (all calculations should be done at this level).

P can be found by dividing total revenue by units sold.

VC can be found by dividing total variable costs by unitssold.

a. Compute DOL based on the following formula:

b. Confirm that your answer to part a is correct by recomputing DOL using Formula 5–3. There may be a slight difference due to rounding.

DOL = Q (P – VC) / Q(P – VC) – FC

Q represents beginning units sold (all calculations should be done at this level).

P can be found by dividing total revenue by units sold.

VC can be found by dividing total variable costs by unitssold.

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