Electronic Arts (EA) produces hockey posters for sale. They have fixed expenses of $284,000 per month plus variable costs of $2.40 per hockey poster. Electronic Arts sells each poster for $9.50. EA has a target monthly income of $216,000. What is Electronic Arts' operating leverage if it achieves its operating income goal?

Answer rating: 100% (QA)

To calculate the operating leverage we need to know the contribution margin and the fixed costs of t... View the full answer