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What is the degree of operating leverage

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Reference no: EM132875463

Question - Oslo Company prepared the following contribution format income statement based on a sales volume of 1,000 units (the relevant range of production is 500 units to 1,500 units):

Sales $20,000

Variable expenses 13,000

Contribution margin 7,000

Fixed expenses 3,780

Net operating income $3,220

Assume that the amounts of the company's total variable expenses and total fixed expenses were reversed. In other words, assume that the total variable expenses are $3,780 and the total fixed expenses are $13,000. Under this scenario and assuming that total sales remain the same, what is the degree of operating leverage?

Reference no: EM132875463

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