U.S. Steal has the following income statement data:
Units Sold 
Total Variable Costs 
Fixed Costs 
Total Costs 
Total Revenue 
Operating Income (Loss) 

105,000  $  210,000  $  80,000  $  290,000  $  420,000  $  130,000  
125,000  250,000  80,000  330,000  500,000  170,000  

The top row of the table has the beginning values and the bottom
row of the table has the ending values.
a. Compute the degree of operating leverage (DOL) based on the formula below. (Do not round intermediate calculations. Round your final answer to 2 decimal places.)
DOL  =  Percent change in operating income 
Percent change in units sold 

b. Recompute DOL using the formula given below.
There may be a slight difference due to rounding. (Do not round intermediate
calculations. Round your final answer to 2 decimal
places.)
DOL  =  Q(P − VC) 
Q(P − VC) − FC 
Q represents beginning units sold (all calculations should
be done at this level).
P can be found by dividing total revenue by units
sold.
VC can be found by dividing total variable costs by units sold.

DOL 
% change in operating income/ percent change in units sold 
30.77%/19.05% 
1.62 
% change in operating income 
(170000130000)/130000 
30.77% 

% change in units sold 
(125000105000)/105000 
19.05% 

beginning 
Year end 

total evenue 
420000 
500000 

quantity 
105000 
125000 

selling price per unit 
4 
4 

total variable cost 
210000 
250000 

quantity 
105000 
125000 

variable cost per unit 
2 
2 

fixed cost 
80000 
80000 

DOL 
(125000*(42)) / (125000*(42)80000) 
1.470588 
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