Given the following income statement for OR company for 20X4: Sales (30,000 units) P 600,000 Less operating expenses: Variable P 390,000 Fixed 140,000 530,000 Net income P 70,000 The company’s degree of operating leverage is a. 3 b. 2 c. 4.28 d. 8.57

Given the following income statement for OR company for 20X4: Sales (30,000 units) P 600,000 Less operating expenses: Variable P 390,000 Fixed 140,000 530,000 Net income P 70,000 The company’s degree of operating leverage is a. 3 b. 2 c. 4.28 d. 8.57

EBK CFIN

6th Edition

ISBN:9781337671743

Author:BESLEY

Publisher:BESLEY

Chapter12: Capital Structure

Section: Chapter Questions

Problem 10PROB

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Question

100%

Given the following income statement for OR company for 20X4:

Sales (30,000 units) P 600,000

Less operating expenses:

Variable P 390,000

Fixed 140,000 530,000

Net income P 70,000

The company’s degree of operating leverage is

a. 3

b. 2

c. 4.28

d. 8.57

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