Answer:
2.4
Explanation:
Frontier corporation sells unit for $57
The unit variable cost is $29
Fixed cost is $164,000
Frontier sells 10,000 units
The first step is to calculate the contribution margin
= 57-29×10,000
= 28×10,000
= 280,000
Profit = 280,000-164,000
= 116,000
Degree of operating leverage can be calculated as follows
= 280,000/116,000
= 2.4
