Patel Industries produces a single product. Its annual revenue is $2,400,000, and its net operating profit is $120,000. The company incurs fixed costs of $600,000. What is Patel Industries' degree of operating leverage? a) 3x b) 5x c) 6x d) 7x

Patel Industries produces a single product. Its annual revenue is $2,400,000, and its net operating profit is $120,000. The company incurs fixed costs of $600,000. What is Patel Industries' degree of operating leverage? a) 3x b) 5x c) 6x d) 7x

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter3: Cost-volume-profit Analysis

Section: Chapter Questions

Problem 14EB: Company A has current sales of $4,000,000 and a 45% contribution margin. Its fixed costs are...

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Please provide the accurate answer to this general accounting problem using valid techniques.

Patel Industries produces a single product. Its annual revenue is $2,400,000, and its net
operating profit is $120,000. The company incurs fixed costs of $600,000.
What is Patel Industries' degree of operating leverage?
a) 3x
b) 5x
c) 6x
d) 7x

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