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Harrison Corp. reports a contribution margin of $900,000 and fixed costs of $600,000. a. Compute the company's degree of operating leverage. b. If sales increase by 15%, what amount of income will Harrison Corp. report?

Harrison Corp. reports a contribution margin of $900,000 and fixed costs of $600,000. a. Compute the company's degree of operating leverage. b. If sales increase by 15%, what amount of income will Harrison Corp. report?

Principles of Accounting Volume 2
Principles of Accounting Volume 2
19th Edition
ISBN:9781947172609
Author:OpenStax
Publisher:OpenStax
Chapter3: Cost-volume-profit Analysis
Section: Chapter Questions
Problem 22MC: If a firm has a contribution margin of $59,690 and a net income of $12,700 for the current month,...
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Harrison Corp. reports a contribution margin of $900,000 and fixed costs of $600,000. a. Compute the company's degree of operating leverage. b. If sales increase by 15%, what amount of income will Harrison Corp. report?
Transcribed Image Text:Harrison Corp. reports a contribution margin of $900,000 and fixed costs of $600,000. a. Compute the company's degree of operating leverage. b. If sales increase by 15%, what amount of income will Harrison Corp. report?
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