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Anna11 [10]
3 years ago
6

LO 3.5If a firm has a contribution margin of $59,690 and a net income of $12,700 for the current month, what is their degree of

operating leverage?
0.18
1.18
2.4
4.7
Business
1 answer:
Mamont248 [21]3 years ago
5 0

Answer:

4.7

Explanation:

The computation of the degree of operating leverage is presented below:

= Contribution margin ÷ Net income

= $59,690 ÷ $12,700

= 4.7

where,

Contribution margin = Sales - Variable costs

And, the net income would be

= Sales - Variable costs - Fixed costs

The net income is also known as earning before interest and taxes

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Answer:

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Explanation:

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In the question, the three economic factors mentioned to be considered by the company as part of the economic dimension are Consumer Price Index, manufacturing and retail inventory levels, and consumer confidence measures.

The Consumer Price Index (CPI) measures the weighted average of prices of a basket of commodities like cloth, food, transportation, etc. This is calculated as average of the changes in prices of the chosen basket of goods and services.

Manufacturing inventory are raw material or work-in-progress items kept in stock to produce goods, while retail inventory are the finished goods kept in stock to be sold.

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Answer:

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