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Solve the degree of operating leverage

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Reference no: EM132521740

Degree of Operating Leverage

Head-First Company plans to sell 5,000 bicycle helmets at $75 each in the coming year. Unit variable cost is $50 (includes direct materials, direct labor, variable factory overhead, and variable selling expense). Total fixed cost equals $49,500 (includes fixed factory overhead and fixed selling and administrative expense). Operating income at 5,000 units sold is $75,500.

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Question 1: Calculate the degree of operating leverage. (Round your answer to the nearest tenth.)

Reference no: EM132521740

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