20060301
15-13-1
Operating Leverage
15-13 Operating Leverage
Operating leverage lets you calculate the degree of change in net earnings arising from a
change in sales amount.
Operating Leverage Field
s
The following fields appear on the Operating Leverage calculation page.
Field
De
s
cription
SAL
Amount currently obtained from sales
VC
Variable cost for this level of production
FC
Fixed costs
DOL
Degree of operating leverage
I
Example
What is the degree of operating leverage for a company with sales ([SAL]) of $1,200,000,
variable costs ([VC]) of $600,000, and fixed costs ([FC]) of $200,000?
• You can also calculate sales amount ([SAL]), variable costs ([VC]), or fixed costs ([FC]) by
inputting the other three values and tapping the button for the result you want.
Calculation Formula
s
SAL
–
VC
–
FC
DOL
=
SAL
–
VC
Summary of Contents for ClassPad 330
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