The February contribution format income statement of Mcabier Corporation appears below:
a. Degree of operating leverage = Contribution margin/Net operating income
= $251,100/$41,300 = 6.08
b. Percent increase in net operating income = Percent increase in sales Degree of operating leverage = 19% /6.08 = 115.52%
Sales................................... $211,20 0
Variable expenses.............. 96,000
Contribution margin.......... 115,200
Fixed expenses................... 84,100
Net operating income......... $ 31,100
The degree of operating leverage is closest to:
A) 0.27
B) 6.79
C) 3.70
D) 0.15
