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Alberts Enterprises has sales of 3,000 units at $80 per unit. Variable costs are 35% of...

Alberts Enterprises has sales of 3,000 units at $80 per unit. Variable costs are 35% of the sales price. If total fixed costs are $66,000, what is the the degree of operating leverage?

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Answer #1
Degree of operating leverage =                                 1.73
Sales(3000*80)    240,000.00
Variable costs(35%)      84,000.00
Contribution Margin    156,000.00
Fixed Cost      66,000.00
Operating income

     90,000.00
Degree of operating leverage = Contribution Margin / Operating income
Degree of operating leverage =                    156,000.00 /                   90,000.00
Degree of operating leverage =                                 1.73


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