Answer:
Degree of operating leverage= 1.4
Explanation:
Giving the following information:
Sales $6,160,000
Variable costs (4,620,000)
Contribution margin $1,540,000
Fixed costs (440,000)
Operating income $1,100,000
To calculate the degree of operating leverage, we need to use the following formula:
degree of operating leverage= Total contribution margin / operating income
degree of operating leverage= 1,540,000 / 1,100,000
degree of operating leverage= 1.4
