Feder man Company has sales of 4,500 units at $95 per unit. Variable costs are 40% of the sales price. If total fixed costs are $128,250, the degree of operating leverage is: A. 0.85 B. 1.60 C. 2.00 D. 2.50
Feder man Company has sales of 4,500 units at $95 per unit. Variable costs are 40% of the sales price. If total fixed costs are $128,250, the degree of operating leverage is: A. 0.85 B. 1.60 C. 2.00 D. 2.50
Chapter14: Capital Structure Management In Practice
Section14.A: Breakeven Analysis
Problem 7P
Related questions
Question
The degree of operating leverage
Transcribed Image Text:Feder man Company has sales of
4,500 units at $95 per unit. Variable
costs are 40% of the sales price. If
total fixed costs are $128,250, the
degree of operating leverage is: A.
0.85 B. 1.60 C. 2.00 D. 2.50
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
Step by step
Solved in 2 steps
Recommended textbooks for you
EBK CONTEMPORARY FINANCIAL MANAGEMENT
Finance
ISBN:
9781337514835
Author:
MOYER
Publisher:
CENGAGE LEARNING - CONSIGNMENT
EBK CONTEMPORARY FINANCIAL MANAGEMENT
Finance
ISBN:
9781337514835
Author:
MOYER
Publisher:
CENGAGE LEARNING - CONSIGNMENT