Homework Help is Here – Start Your Trial Now!
Business
Accounting
A company has fixed costs of $500,000 and depreciation of $150,000, and it is expected to produce $200,000 in profits. What is its Degree of Operating Leverage (DOL)? a. 3.25 b. 4.25 c. 4.50 d. 3.75

A company has fixed costs of $500,000 and depreciation of $150,000, and it is expected to produce $200,000 in profits. What is its Degree of Operating Leverage (DOL)? a. 3.25 b. 4.25 c. 4.50 d. 3.75

Principles of Accounting Volume 2
Principles of Accounting Volume 2
19th Edition
ISBN:9781947172609
Author:OpenStax
Publisher:OpenStax
Chapter3: Cost-volume-profit Analysis
Section: Chapter Questions
Problem 23MC: If a firm has a contribution margin of $78M90 and a net income of $13,700 for the current month,...
See similar textbooks
icon
Related questions
Question

Please explain the solution to this general accounting problem with accurate explanations.

A company has fixed costs of $500,000 and depreciation of $150,000, and it is expected to produce $200,000 in profits. What is its Degree of Operating Leverage (DOL)? a. 3.25 b. 4.25 c. 4.50 d. 3.75
Transcribed Image Text:A company has fixed costs of $500,000 and depreciation of $150,000, and it is expected to produce $200,000 in profits. What is its Degree of Operating Leverage (DOL)? a. 3.25 b. 4.25 c. 4.50 d. 3.75
Expert Solution
steps

Step by step

Solved in 2 steps

SEE SOLUTIONCheck out a sample Q&A here
Blurred answer