What formula is used to calculate the degree of operating leverage?
A) total sales / profit
B) profit / fixed costs
C) profit / variable costs
D) contribution margin / profit

Question

Quizplus · Accepted Answer

The formula to calculate the degree of operating leverage is Contribution Margin divided by Profit or Net Income: 
Degree of Operating Leverage = Contribution Margin / Net Income.
Therefore, choice D (Contribution Margin / Profit) is the correct option.

What Formula Is Used to Calculate the Degree of Operating