Actual operating results for the shop are presented below: S     250,000.00 VC     100,000.00 CM     150,000.00 FX     120,000.00 NI        30,000.00 Required: Compute the Degree of Operating Leverage Factor Using the said concept, how many percent would income increase if the sales increase by 10%?

EBK CONTEMPORARY FINANCIAL MANAGEMENT
14th Edition
ISBN:9781337514835
Author:MOYER
Publisher:MOYER
Chapter14: Capital Structure Management In Practice
Section: Chapter Questions
Problem 11P
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  1. Actual operating results for the shop are presented below:

S

    250,000.00

VC

    100,000.00

CM

    150,000.00

FX

    120,000.00

NI

       30,000.00

Required:

  1. Compute the Degree of Operating Leverage Factor
  2. Using the said concept, how many percent would income increase if the sales increase by 10%?
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