The degree of operating leverage last year was 1 answer below »

Pricher Corporation”s income statement for last year appears below:

Sales

 

$2,000,000 

Cost of goods sold:

 

 

Direct materials

$500,000

 

Direct labor (variable)

150,000

 

Variable manufacturing overhead

50,000

 

Fixed manufacturing overhead

600,000

 

Gross margin

$500,000

1,300,000

Selling and administrative expenses:

150,000

700,000

Variable

100,000

 

Fixed

300,000

400,000

Net operating income

 

$ 300,000

The degree of operating leverage last year was:

A) 0.33

B) 2.33

C) 4.00

D) 3.33