Ask Question
5 February, 02:32

Elite Company had originally expected to earn operating income of $140,000 in the coming year. Elite's degree of operating leverage is 2.6. Recently, Elite revised its plans and now expects to increase sales by 25% next year. What is the percent change in operating income expected by Elite in the coming year

+5
Answers (1)
  1. 5 February, 02:56
    0
    65%

    Explanation:

    The computation of the percentage change in operating income is shown below:

    Degree of Operating leverage = Percentage change in operating income : Percentage change in sales

    2.6 = Percentage change in operating income : 25%

    So,

    Percentage change in operating income is

    = 2.6 * 25%

    = 65%

    We simply multiplied the degree of operating leverage with the percentage in sales so that the percentage change in operating income could come
Know the Answer?
Not Sure About the Answer?
Find an answer to your question 👍 “Elite Company had originally expected to earn operating income of $140,000 in the coming year. Elite's degree of operating leverage is 2.6. ...” in 📗 Business if the answers seem to be not correct or there’s no answer. Try a smart search to find answers to similar questions.
Search for Other Answers