Principles of Accounting Volume 2
Principles of Accounting Volume 2
19th Edition
ISBN: 9781947172609
Author: OpenStax
Publisher: OpenStax College
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ABC Manufacturing has the following financial data: Sales:
$250,000 Variable expenses: $150,000 (60% of sales) Contribution
margin: $100,000 (40% of sales) Fixed expenses: $60,000 Net
operating income: $40,000
Calculate:
1. The degree of operating leverage
2. The impact on net operating income if sales increase by 15%"
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Transcribed Image Text:ABC Manufacturing has the following financial data: Sales: $250,000 Variable expenses: $150,000 (60% of sales) Contribution margin: $100,000 (40% of sales) Fixed expenses: $60,000 Net operating income: $40,000 Calculate: 1. The degree of operating leverage 2. The impact on net operating income if sales increase by 15%"
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