Solved: What is taco reys operating leverage if required round your, Managerial Accounting

What is taco reys operating leverage if required round your

Taco Rey Restaurant had the following information available related to its operations from last year:

Sales (156,000 units)	$580,000
Variable costs	170,000
Contribution margin	$410,000
Fixed costs	120,000
Net operating income	$290,000

Required:

A. What is Taco Rey's operating leverage? If required, round your answer to two decimal places.

B. If sales increased by 25 percent, what would Taco Rey's net operating income be?

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