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Kendall Company has sales of 2,375 units at $40 a unit. Variable expenses are 20% of the selling price. If total fixed expenses are $66,000, the degree of operating leverage is: rev: 03_06_2012 2.07 1.90 9.50 7.60 Solution Degree of operating leverage =(sales variable costs)Ã·(sales variable costs fixed costs) =(2,375Ã—$40-2,375Ã—$40Ã—20%)Ã·(2,375Ã—$40-2,375Ã—$40Ã—20%-$66,000) =7.6 .

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- Kendall Company has sales of 2,375 units at $40 a unit. Variable expenses are 20% of the selling price. If total fixed expenses are $66,000, the degree of operating leverage is: rev: 03_06_2012 2.07 1.90 9.50 7.60 Kendall Company has sales of 2,375 units at $40 a unit. Variable expenses are 20% of the selling price. If total fixed expenses are $66,000, the degree of operating leverage is: Solution Degree of operating leverage =(sales variable costs)Ã·(sales variable costs fixed costs) =(2,375Ã—$40-2,375Ã—$40Ã—20%)Ã·(2,375Ã—$40-2,375Ã—$40Ã—20%-$66,000) =7.6

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