FINANCIAL ACCOUNTING
10th Edition
ISBN: 9781259964947
Author: Libby
Publisher: MCG
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The sales and cost data for two companies in the transportation industry are as follows:
X Company | Y Company | |||||||||||
Amount | Percent | Amount | Percent | |||||||||
Sales | $ | 150,000 | 100.00 | $ | 150,000 | 100.00 | ||||||
Variable costs | 90,000 | 60.00 | 45,000 | 30.00 | ||||||||
Contribution margin | 60,000 | 40.00 | 105,000 | 70.00 | ||||||||
Fixed costs | 34,200 | 70,250 | ||||||||||
Operating income (πB) | $ | 25,800 | $ | 34,750 | ||||||||
X Company's degree of operating leverage (DOL) at the current sales volume level is calculated to be:
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