Calculating Operating Leverage

question 42

Multiple Choice

Calculating operating leverage. Coach K Sneakers Ltd had EBIT of $1,850 last year with fixed costs equal to $500 (depreciation and amortisation not included) and depreciation and amortisation equal to $150. What was Coach K's degree of accounting operating leverage?

• A) 1.25
• B) 1.35
• C) 1.38
• D) 1.40