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Cartersville Co. reports the following data:

Sales $787,100
Variable costs (480,100)
Contribution margin $307,000
Fixed costs (246,800)
Operating income $60,200

Determine Cartersville Co.’s operating leverage. Round your answer to one decimal place.

Respuesta :

Answer:

5.1(Approx)

Explanation:

Given that,

Sales = $787,100

Variable costs = (480,100)

Contribution margin = $307,000

Fixed costs = (246,800)

Operating income = $60,200

Operating leverage:

= Contribution margin ÷ Operating income

= $307,000 ÷ $60,200

= 5.1 (Approx).

Therefore, the operating leverage of Cartersville Co. is 5.1 (approx).

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