Question: Units Sold Total Variable Costs Fixed Costs Total Costs Total Revenue Operating Income (loss) 100,000 300,000 90,000 390,000 600,000 210,000 120,000 360,000 90,000 450,000 720,000
| Units Sold | Total Variable Costs | Fixed Costs | Total Costs | Total Revenue | Operating Income (loss) |
| 100,000 | 300,000 | 90,000 | 390,000 | 600,000 | 210,000 |
| 120,000 | 360,000 | 90,000 | 450,000 | 720,000 | 270,000 |
A.
Compute the degree of operating leverage (DOL) based on the formula below. (Do not round intermediate calculations. Round your final answer to 2 decimal places.)
| DOL | = | Percent change in operating income |
| Percent change in units sold |
B.
Recompute DOL using the formula given below. There may be a slight difference due to rounding. (Do not round intermediate calculations. Round your final answer to 2 decimal places.)
| DOL | = | Q(P VC) |
| Q(P VC) FC |
Q represents beginning units sold (all calculations should be done at this level). P can be found by dividing total revenue by units sold. VC can be found by dividing total variable costs by units sold.
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