Analyze the information below carefully calculate the Operating Leverage for this Firm . Is this a favorable ratio ? Revenue Variables costs $ 550,000 Contribution margin _ (250.000 ) Fixed costs 300,000 ( 200,000 ) EBIT 100,000 Finance costs Profit for the year * Hint Operating Leverage (25.000 ) $ 75,000 Contribution Margin EBIT

a The operating leverage ratio is 0.333 which signals a favorable ratio

b The operating leverage ratio is 0.333 which signals a favorable ratio

coperating leverage ratio 3.0 , this indicates the company has relatively high fixed costs compared to variable costs and more risk

dThe operating leverage ratio is , this indicates the company has relatively low fixed costs compared to vari costs and less risk