ABC Company manufactures computer monitors. Following is a summary of its basic cost and revenue data:...
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ABC Company manufactures computer monitors. Following is a summary of its basic cost and revenue data: Sales price Variable costs contribution margin Per Unit $ 580 348 $ 232 1. Calculate ABC Company's degree of operating leverage (DOL) if 700 units are sold. 2. Define what is meant by the DOL. 3. Of what purpose/value is the DOL to decision makers? Percent 100 60 40 Assume that ABC Company is currently selling 700 computer monitors per month. Fixed costs are expected to be $96,000. Required: ABC Company manufactures computer monitors. Following is a summary of its basic cost and revenue data: Sales price Variable costs contribution margin Per Unit $ 580 348 $ 232 1. Calculate ABC Company's degree of operating leverage (DOL) if 700 units are sold. 2. Define what is meant by the DOL. 3. Of what purpose/value is the DOL to decision makers? Percent 100 60 40 Assume that ABC Company is currently selling 700 computer monitors per month. Fixed costs are expected to be $96,000. Required:
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Answer rating: 100% (QA)
1 To calculate ABC Companys degree of operating leverage DOL when 700 units are sold we can use the following formula DOL Contribution Margin Operatin... View the full answer
Related Book For
Management Accounting
ISBN: 978-0132570848
6th Canadian edition
Authors: Charles T. Horngren, Gary L. Sundem, William O. Stratton, Phillip Beaulieu
Posted Date:
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