What is the company degree of operating leverage

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Question - See the data below and answer the assigned questions. Show all of your calculations.

Variable exp 800,000

Sales 1,200,000

Contribution margin 400,000

Fixed exp 300,000

Net operating income 100,000

The company has no beginning or ending inventories and produced and sold 20,000 units during the month.

Required -

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

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

c. If sales increase by 100 units, by how much should net operating income increase?

d. How many units would the company have to sell to attain a target profit of $125,000?

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

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

Reference no: EM133075942

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