$156,332 81,532 30,800 Sales Variable costs Fixed costs Determine Tom Company's operating leverage. Round your answer to one decimal place.
$156,332 81,532 30,800 Sales Variable costs Fixed costs Determine Tom Company's operating leverage. Round your answer to one decimal place.
Managerial Accounting
15th Edition
ISBN:9781337912020
Author:Carl Warren, Ph.d. Cma William B. Tayler
Publisher:Carl Warren, Ph.d. Cma William B. Tayler
Chapter7: Variable Costing For Management
analysis
Section: Chapter Questions
Problem 16E
Related questions
Question

Transcribed Image Text:Tom Company reports the following data:
Sales
Variable costs
Fixed costs
Determine Tom Company's operating leverage. Round your answer to one decimal place.
$156,332
81,532
30,800
Expert Solution

Step 1
Degree of operating leverage = [number of units x (price per unit - variable cost per unit)] / number of units x (price per unit - variable cost per unit) - fixed operating costs
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