Solved: Calculate the degree of operating leverage margin of safety, Accounting Basics

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Calculate the degree of operating leverage margin of safety

Problem

RSE Corporation sells its product for $11 per unit. Its variable cost is $2 per unit, and total fixed costs are $600. Assuming next period's estimated sales are 240 units and that 240 units is within the relevant range.

Calculate the following amounts:

a.?Degree of operating leverage?
b.?Margin of safety in units
c.?Margin of safety in revenues (in $)
d.?Estimated income or loss.

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Accounting Basics: Calculate the degree of operating leverage margin of safety

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Accounting Basics: Calculate the degree of operating leverage margin of safety

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