The following data related to a product are available Contribution margin (P60 per unit) Total fixed...

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The following data related to a product are available Contribution margin (P60 per unit) Total fixed cost and expenses CMR P2,000,000 1,200,000 40% Required: a. DOL b. What would be the percentage increase in EBIT if sales are expected to increase to P7,000,000 c. If the firm wants to increase its DOL to 4.0 in the coming period, how much should be needed in fixed costs assuming the contribution margin remains the same? The following data related to a product are available Contribution margin (P60 per unit) Total fixed cost and expenses CMR P2,000,000 1,200,000 40% Required: a. DOL b. What would be the percentage increase in EBIT if sales are expected to increase to P7,000,000 c. If the firm wants to increase its DOL to 4.0 in the coming period, how much should be needed in fixed costs assuming the contribution margin remains the same?

Answer rating: 100% (QA)

a Degree of Operating Leverage DOL measures the sensitivity of operating income EBIT to changes in s... View the full answer