A company reports the following financial data for two consecutive years: Year 1: Sales: $30,000 Variable Costs: $14,000 Operating Income: $9,000 Year 2: Sales: $50,000 Variable Costs: $18,000 Operating Income: $19,000 Calculate the degree of operating leverage (DOL), rounding to two decimal places.

A company reports the following financial data for two consecutive years: Year 1: Sales: $30,000 Variable Costs: $14,000 Operating Income: $9,000 Year 2: Sales: $50,000 Variable Costs: $18,000 Operating Income: $19,000 Calculate the degree of operating leverage (DOL), rounding to two decimal places.

Managerial Accounting: The Cornerstone of Business Decision-Making

7th Edition

ISBN:9781337115773

Author:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger

Publisher:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger

Chapter11: Performance Evaluation And Decentralization

Section: Chapter Questions

Problem 27E: Margin, Turnover, Return on Investment, Average Operating Assets Elway Company provided the...

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