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What is the degree of operating leverage

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Question - A new subsidiary in the group ha monthly operating expenses of about RM 55,000.00 and a financial cost of RM 15,000. There are producing natural mineral water and making and average profit margin of 30% on sales. Their current sale level is RM 580,000.00 per month.

Required -

a. What is the breakeven point of the company's factory and how do you interpret it?

b. What is the Margin of safety of the company and what does it tell?

c. What is the Degree of Operating leverage of the company and what does it mean?

d. What is the Degree of Financial Leverage of the company and what does it mean?

Reference no: EM133158140

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