Evaluate the following statement: Tunemony Craft has a degree of accounting operating leverage of 1.2. If EBIT increases 24 percent, then the firm must have had a 20 percent increase in revenue if no other changes were involved.

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The degree of accounting operating leverage (DOL) is calculated as the percentage change in EBIT divided by the percentage change in revenue. If DOL is 1.2 and EBIT increases by 24%, then the percentage change in revenue is 24% / 1.2 = 20%.

Evaluate the Following Statement: Tunemony Craft Has a Degree of Accounting