### Compute the degree of operating leverage for each company

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Question - Company A is a manufacturer with current sales of \$3,300,000 and a 60% contribution margin. Its fixed costs equal \$1,450,000. Company B is a consulting firm with current service revenues of \$3,200,000 and a 30% contribution margin. Its fixed costs equal \$460,000.

Compute the degree of operating leverage (DOL) for each company.

A) Contribution Margin Income Statement

B) Degree of Operating Leverage

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