Shorter Company had originally expected to earn operating income of $130,000 in the coming year.Shorter's degree of operating leverage is 2.4.Recently, Shorter revised its plans and now expects to increase sales by 20% next year.What is Shorter's revised expected operating income for the coming year?
A) $192,400
B) $156,000
C) $312,000
D) $130,000
E) $62,400

Question

Quizplus · Accepted Answer

$130,000 + (0.48 × $130,000) = $192,400

Shorter Company Had Originally Expected to Earn Operating Income of $130,000