Answered: Identify the formula that computes the…

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Identify the formula that computes the degree of operating leverage (DOL).

Managerial Accounting: The Cornerstone of Business Decision-Making

7th Edition

ISBN:9781337115773

Author:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger

Publisher:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger

Chapter7: Cost-volume-profit Analysis

Section: Chapter Questions

Problem 6MCQ: The use of fixed costs to extract higher percentage changes in profits as sales activity changes...

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Question

Identify the formula that computes the degree of operating leverage (DOL).

a.Total variable cost / Sales

b.Unit variable cost / Price

c.Break-even sales / Variable cost ratio

d.Total contribution margin / Operating income

e.Sales / Unit contribution marg

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