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What is the company degree of operating leverage

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Reference no: EM133101323

Question - The following is Addison Corporation's contribution format income statement for last month:

Sales $1,000,000

Variable expenses 700,000

Contribution margin 300,000

Fixed expenses 180,000

Net Operating income $120,000

The company has no beginning or ending inventories. A total of 20,000 units were produced and sold last month.

Required -

1. What is the company's contribution margin ratio?

2. What is the company's break-even in units?

3. How many units would the company have to sell to attain the target profit of $150,000?

4. What is the company's margin of safety in dollars?

5. What is the company's degree of operating leverage?

Reference no: EM133101323

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