Managerial Accounting

Free Version

Upgrade subject to access all content


Calc Change in Profits Given Change in Sales Operating Leverage


Your client's information for the recent year just ended are shown below:

Last Year's Operations:
Sales \$1,500,000
Variable costs \$600,000
Fixed costs \$300,000

If their sales volume increases by 2%, by what percentage do you expect their profits to increase (express response as a percent)?