In the Most Recent Month, Faulkner Corporation's Total Contribution Margin

question 93

Essay

In the most recent month, Faulkner Corporation's total contribution margin was $208,000 and its operating profit $39,400.
Required:
a. Compute the degree of operating leverage to two decimal places.
b. Using the degree of operating leverage, estimate the percentage change in operating profit that should result from a 1% increase in sales.

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Definitions:

CNS

Central Nervous System, which includes the brain and spinal cord, responsible for processing and coordinating information in the body.

Efferent Neurons

Nerve cells that conduct impulses away from the central nervous system to muscles and glands.

Chain Ganglia

Collections of neuron cell bodies located outside the central nervous system and along the course of peripheral nerves, involved in transmitting nerve impulses.

Sympathetic Branch

Part of the autonomic nervous system that controls the body's responses to stress, including the fight-or-flight response.