Assuming No Change in Cost Behaviour as Volume Increases, DOL

question 102

Multiple Choice

Assuming no change in cost behaviour as volume increases, DOL will decrease
June CM = 8,000 * 10.30 = 82,400 DOL = 82,400/(82,400 - 80,000) = 34.33.
For July = (10,000 * 10.30) /(10,000 * 10.30 - 80,000) = 4.477.

-The degree of operating leverage for July is closest to which of the following?

• A) 4.48.
• B) 3.48.
• C) 4.22.
• D) 8.70.

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