Given the following information extracted from the income statement of Widget Company ( Widget Company has no depreciation or amortization expenses),

The degree of total leverage of Widget Company is closest to:
A) 2.80
B) 3.25
C) 3.50
D) 4.00

Question

Given the following information extracted from the income statement of Widget Company ( Widget Company has no depreciation or amortization expenses),
  
The degree of total leverage of Widget Company is closest to: 
A) 2.80 
B) 3.25 
C) 3.50 
D) 4.00

Quizplus · Accepted Answer

Contribution margin: $7 per unit.CM= 7*150 = 1,050.EBT = 600-200-100 = $300.DTL = 1,050 / 300 = 3.50

Given the Following Information Extracted from the Income Statement of Widget