How To Calculate

Learn how to calculate anything
Menu
  • bmi
Home
rate
How to Calculate Operating Leverage.
rate

How to Calculate Operating Leverage.

Rosemary Njeri

Operating leverage is a cost-accounting formula that measures the degree to which a firm or project can increase operating income by increasing revenue.

Companies with high degrees of operating leverage experience more significant changes in profit when revenues change.

Formula to calculate operating leverage.

Calculate Operating Leverage.

The contribution margin is the difference between total sales and total variable costs.

Example:

If the contribution margin is $ 420,000 and the operating income is $ 600,000. Calculate the operating leverage.

 Calculate Operating Leverage.

Therefore, the operating leverage is 70%.

Share
Tweet
Reddit
Pinterest
Email
Prev Article
Next Article

Related Articles

How to Calculate Federal Withholding.
Federal withholding is where your employer takes a certain amount …

How to Calculate Federal Withholding.

How To Calculate Rate
All through life, there are many times you will come …

How To Calculate Rate

Leave a Reply Cancel Reply

Popular Posts

  • 5 Best AI Apps for Solving Complex …
    March 22, 2023 0

Categories

learntocalculate.com is a participant in the Amazon Services LLC Associates Program, an affiliate advertising program designed to provide a means for sites to earn advertising fees by advertising and linking to amazon.com.

How To Calculate

Learn how to calculate anything

Pages

  • About Us
  • Contact Us
  • Privacy Policy
Copyright © 2023 How To Calculate

Ad Blocker Detected

Our website is made possible by displaying online advertisements to our visitors. Please consider supporting us by disabling your ad blocker.

Refresh