Oslo Company prepared the following contribution format income statement based on a sales volume of 1,000 units (the relevant range of production is 500 units to 1,500 units): Sales Variable expenses Contribution margin Fixed expenses Net operating income $ 20,000 12,000 Degree of operating leverage 8,000 6,000 $ 2,000 Foundational 6-12 (Static) 12. What is the degree of operating leverage?
Oslo Company prepared the following contribution format income statement based on a sales volume of 1,000 units (the relevant range of production is 500 units to 1,500 units): Sales Variable expenses Contribution margin Fixed expenses Net operating income $ 20,000 12,000 Degree of operating leverage 8,000 6,000 $ 2,000 Foundational 6-12 (Static) 12. What is the degree of operating leverage?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:Oslo Company prepared the following contribution format income statement based on a sales volume
of 1,000 units (the relevant range of production is 500 units to 1,500 units):
Sales
Variable expenses
Contribution margin
Fixed expenses
Net operating income
$ 20,000
12,000
Degree of operating leverage
8,000
6,000
$ 2,000
Foundational 6-12 (Static)
12. What is the degree of operating leverage?
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