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21 May, 14:02

Cartersville Co. reports the following dа ta:

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.

+1
Answers (1)
  1. 21 May, 17:02
    0
    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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