The degree of operating leverage is? Finch Co. has sales of 4,800 units at $97per unit. Variable costs are 42% of thesales price. If total fixed costs are$132,000, the degree of operatingleverage isa. 0.80b. 1.96c. 2.05d. 2.40

Explanation of Degree of Operating Leverage (DOL): The degree of operating leverage measures the…

Answered: Finch Co. has sales of 4,800 units at…

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter14: Capital Structure Management In Practice

Section14.A: Breakeven Analysis

Problem 7P

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Finch Co. has sales of 4,800 units at $97 per unit. Variable costs are 42% of the sales price. If total fixed costs are $132,000, the degree of operating leverage is a. 0.80 b. 1.96 c. 2.05 d. 2.40