Outback Products Reports the Following Information $$\begin{array} { l l } \text { Total contribution margirl } & \$ 32,000 \\\text { Total fixed costs } & \$ 28,000\end{array}$$

question 138

Essay

Outback Products reports the following information:
$$\begin{array} { l l } \text { Total contribution margirl } & \$ 32,000 \\\text { Total fixed costs } & \$ 28,000\end{array}$$ Required:
a.Calculate Outback Products' degree of operating leverage (DOL).
b.Outback Products forecasts a 6% increase in sales.What is the expected effect in percent on pretax income?

---

Definitions:

Collaboration

The process of two or more people or organizations working together to complete a task or achieve a goal.

Reporting Relationships

The formal lines of authority and communication between positions within an organization.

Competitiveness

The inclination to strive for success or to win in situations where one is compared against others.

Pride

A sense of profound pleasure that comes from personal accomplishments, the success of close associates, or from having attributes or belongings that are greatly esteemed.