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Calculate the firm degree of operating leverage

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Question - DailyDose, Inc. creates daily vitamin packs. They currently have one? product, the All Is Well blend of vitamins. The fixed cost for producing these vitamins is $332174. The firm currently sells these vitamin packs for $5.11/pack. They spend $1.35 in variable costs per unit. During the year, the firm produces and sells 480,000 units.

a. Calculate the firm's Degree of Operating Leverage.

b. Calculate the effect (% change) on operating income that a 35% change in units sold will cause.

Reference no: EM132914457

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