New degree of operating leverage


Problem:

At an output level of 19,000 units, you have calculated that the degree of operating leverage is 3.50. The operating cash flow is $86,900 in this case. Ignore the effect of taxes.

Required:

Question: What will be the new degree of operating leverage for 20,000 units and 18,000 units?

Note: Show supporting computations in good form.

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Accounting Basics: New degree of operating leverage
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