The company”s degree of operating leverage

A manufacturer of tiling grout has supplied the following data:

Kilograms produced and sold

300,000

Sales revenue

$1,950,000

Variable manufacturing expense

$960,000

Fixed manufacturing expense

$266,000

Variable selling and administrative expense

$360,000

Fixed selling and administrative expense

$232,000

Net operating income

$132,000

The company”s degree of operating leverage is closest to:

A) 14.77

B) 2.65

C) 4.77

D) 2.27

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