The company”s degree of operating leverage is closest to
A company that makes organic fertilizer has supplied the following data:
Bags produced and sold
240,000
Sales revenue
$1,896,000
Variable manufacturing expense
$804,000
Fixed manufacturing expense
$520,000
Variable selling and administrative expense
$180,000
Fixed selling and administrative expense
$270,000
Net operating income.
$122,000
The company”s degree of operating leverage is closest to:
A) 1.97
B) 15.54
C) 1.25
D) 7.48