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What is taco rey operating leverage

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Reference no: EM131775334

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?

Reference no: EM131775334

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