Sales $875,000
Variable costs 425,000
Contribution margin $450,000
Fixed costs 150,000
Income from operations $300,000
Determine Westminster Co.’s operating leverage.
Answer:
Operating Leverage =
Contribution Margin
= $450,000
= 1.5
Income from Operations $300,000
SungSam Enterprises reports the following data:
Sales $340,000
Variable costs 180,000
Contribution margin $160,000
Fixed costs 80,000
Income from operations $ 80,000
Determine SungSam Enterprises’s operating leverage.
Answer:
Operating Leverage =
Contribution Margin
= $160,000 = 2
Income from Operations $80,000
