COV 4
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What is Ralph Corporation's margin of safety in dollars?
$1 million
The measure of how sensitive net operating income is to a given percentage change in dollar sales is called _______.
operating leverage
What is Ralph Corporation's margin of safety in percentage?
20%
Winter Corporation's current sales are $500,000. The contribution margin is $300,000 and the net operating income is $100,000. What is the company's degree of operating leverage?
3.00
The current sales of Trent, Inc., are $400,000, with a contribution margin of $200,000. The company's degree of operating leverage is 2. If the company anticipates a 30% increase in sales, what is the percentage change in net operating income for Trent, Inc.?
60%
