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Prime Tech Solutions Ltd. provides IT solutions and services. The company's most recent monthly contribution format income statement is as follows: Category Sales Amount ($) Percent of Sales (%) $200,000 100% Variable Expenses $80,000 40% Contribution Margin $120,000 60% Fixed Expenses $60,000 Net Operating Income $60,000 What is the company's degree of operating leverage?

Prime Tech Solutions Ltd. provides IT solutions and services. The company's most recent monthly contribution format income statement is as follows: Category Sales Amount ($) Percent of Sales (%) $200,000 100% Variable Expenses $80,000 40% Contribution Margin $120,000 60% Fixed Expenses $60,000 Net Operating Income $60,000 What is the company's degree of operating leverage?

Managerial Accounting
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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Prime Tech Solutions Ltd. provides IT solutions and services. The company's most recent monthly contribution format income statement is as follows: Category Sales Amount ($) Percent of Sales (%) $200,000 100% Variable Expenses $80,000 40% Contribution Margin $120,000 60% Fixed Expenses $60,000 Net Operating Income $60,000 What is the company's degree of operating leverage?
Transcribed Image Text:Prime Tech Solutions Ltd. provides IT solutions and services. The company's most recent monthly contribution format income statement is as follows: Category Sales Amount ($) Percent of Sales (%) $200,000 100% Variable Expenses $80,000 40% Contribution Margin $120,000 60% Fixed Expenses $60,000 Net Operating Income $60,000 What is the company's degree of operating leverage?
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