Genentech Corporation prepared the following contribution format income statement based on a sales volume of 1,200 units (the relevant range of production is 600 units to 2,000 units): • • • • • Sales: $30,000 Variable expenses: $18,000 Contribution margin: $12,000 Fixed expenses: $7,500 Net operating income: $4,500 What is the degree of operating leverage?
Genentech Corporation prepared the following contribution format income statement based on a sales volume of 1,200 units (the relevant range of production is 600 units to 2,000 units): • • • • • Sales: $30,000 Variable expenses: $18,000 Contribution margin: $12,000 Fixed expenses: $7,500 Net operating income: $4,500 What is the degree of operating leverage?
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
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Please explain the accurate process for solving this financial accounting question with proper principles.
Transcribed Image Text:Genentech Corporation prepared the following contribution
format income statement based on a sales volume of 1,200 units
(the relevant range of production is 600 units to 2,000 units):
•
•
•
•
•
Sales: $30,000
Variable expenses: $18,000
Contribution margin: $12,000
Fixed expenses: $7,500
Net operating income: $4,500
What is the degree of operating leverage?
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