MANAGERIAL ACCOUNTING FOR MANAGERS
MANAGERIAL ACCOUNTING FOR MANAGERS
6th Edition
ISBN: 9781265365615
Author: Noreen
Publisher: MCG
Question
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Chapter 2, Problem 2.4Q
To determine

 

Concept introduction:

Degree of operating leverage: It shows the relation between change in net operating income and the change in sales.

The formulas for the degree of operating leverage are as follows:

  Degree of operating leverage = Contribution MarginOperating income

  Change in operating income = Changes in sales ×Degree of operating leverage

To indicate: the meaning of the operating leverage.  

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