Taft Co reports the following data Sales $875,000 Variable costs 425,000 Contribution margin $450,000 Fixed costs 150,000 Income from operations $300,000 Determine Taft Co 's operating leverage ...

Taft Co. reports the following data: Sales .............................................. $875,000 Variable costs .................................... 425,000 Contribution margin ............................ $450,000

Question:

Taft Co. reports the following data:
Sales .............................................. $875,000
Variable costs .................................... 425,000
............................ $450,000
Fixed costs ...................................... 150,000
Income from operations ...................... $300,000
Determine Taft Co.'s operating leverage.
Contribution Margin
Contribution margin is an important element of cost volume profit analysis that managers carry out to assess the maximum number of units that are required to be at the breakeven point. Contribution margin is the profit before fixed cost and taxes...