What is Nancy’s degree of operating leverage?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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What is Nancy’s degree of operating leverage?
Transcribed Image Text:Nancy Daniel sells gourmet chocolate chip cookies. The results of her last month of operations are as follows:
Sales revenue
$49,500
Cost of goods sold (all variable)
24,500
Gross margin
25,000
Selling expenses (70% variable)
8,000
Administrative expenses (20% variable)
12,000
Operating income
$5,000
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