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Use the data given below. Sales (30,000 units) $150,000 Variable costs 100,800 Contribution margin $49,200 Fixed manufacturing costs 24,000 Operating income $25,200 Interest 18,000 Earnings before taxes $7,200 Taxes (30%) 2,160 Net income $5,040 600 Shares outstanding The degree of operating leverage (DOL) is: a. 1.58 b. 1.95 c. 3.50 d. 1.40

Use the data given below. Sales (30,000 units) $150,000 Variable costs 100,800 Contribution margin $49,200 Fixed manufacturing costs 24,000 Operating income $25,200 Interest 18,000 Earnings before taxes $7,200 Taxes (30%) 2,160 Net income $5,040 600 Shares outstanding The degree of operating leverage (DOL) is: a. 1.58 b. 1.95 c. 3.50 d. 1.40

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Use the data given below. Sales (30,000 units) $150,000 Variable costs 100,800 Contribution margin $49,200 Fixed manufacturing costs 24,000 Operating income $25,200 Interest 18,000 Earnings before taxes $7,200 Taxes (30%) 2,160 Net income $5,040 600 Shares outstanding The degree of operating leverage (DOL) is: a. 1.58 b. 1.95 c. 3.50 d. 1.40
Transcribed Image Text:Use the data given below. Sales (30,000 units) $150,000 Variable costs 100,800 Contribution margin $49,200 Fixed manufacturing costs 24,000 Operating income $25,200 Interest 18,000 Earnings before taxes $7,200 Taxes (30%) 2,160 Net income $5,040 600 Shares outstanding The degree of operating leverage (DOL) is: a. 1.58 b. 1.95 c. 3.50 d. 1.40
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