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Singh Co. reports a contribution margin of $735,000 and fixed costs of $490,000. a. Compute the company's degree of operating leverage. b. If sales increase by 20%, what amount of income will Singh Co. report?

Singh Co. reports a contribution margin of $735,000 and fixed costs of $490,000. a. Compute the company's degree of operating leverage. b. If sales increase by 20%, what amount of income will Singh Co. 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 14EB: Company A has current sales of $4,000,000 and a 45% contribution margin. Its fixed costs are...
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Singh Co. reports a contribution margin of $735,000 and fixed costs of $490,000. a. Compute the company's degree of operating leverage. b. If sales increase by 20%, what amount of income will Singh Co. report?
Transcribed Image Text:Singh Co. reports a contribution margin of $735,000 and fixed costs of $490,000. a. Compute the company's degree of operating leverage. b. If sales increase by 20%, what amount of income will Singh Co. report?
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