Question: Compute the degree of operating leverage for Roasted Beans and Monat Industries The following CVP income statements are available for Roasted Beans and Monat Industries

Compute the degree of operating leverage for Roasted Beans and Monat Industries

The following CVP income statements are available for Roasted Beans and Monat Industries

Roasted Beans Monat Industries
Sales 1,000,000 1,000,000
Variable Cost 650,000 300,000
Contribution Margin 350,000 700,000
Fixed Costs 175,000 525,000
Net income 175,000 175,000

Title Formula Roasted Beans Monat Industries
Degree of Operating Leverage Contribution Margin/Net income 1. 2.

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