During the most recent fiscal period, Meridian Tech Inc. had a contribution margin of $75,000 and an operating profit of $30,000 on sales of $120,000. Calculate Meridian Tech's: a) Operating Leverage, and b) Profit for next year, assuming sales increase to $144,000.

Principles of Accounting Volume 2
19th Edition
ISBN:9781947172609
Author:OpenStax
Publisher:OpenStax
Chapter12: Balanced Scorecard And Other Performance Measures
Section: Chapter Questions
Problem 6EB: During the current year, Plainfield Manufacturing earned income of $845,000 from total sales of...
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During the most recent fiscal period, Meridian Tech Inc.
had a contribution margin of $75,000 and an operating
profit of $30,000 on sales of $120,000.
Calculate Meridian Tech's:
a) Operating Leverage, and
b) Profit for next year, assuming sales increase to
$144,000.
Transcribed Image Text:During the most recent fiscal period, Meridian Tech Inc. had a contribution margin of $75,000 and an operating profit of $30,000 on sales of $120,000. Calculate Meridian Tech's: a) Operating Leverage, and b) Profit for next year, assuming sales increase to $144,000.
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