Jerry's Dog Food, Inc is a dog food wholesaler located in Greenwich, Connecticut. Selected financial statement values for Jerry's are shown in the table below
What is the degree of operating leverage for Jerry's given the change in revenues from Year 1 to Year 2?
Jerry's Dog Food, Inc
Year 1 Year 2
Revenues $170,000 $185,000
Cost of Goods Sold 140,000 148,000
SG&A 10,000 11,000
Depreciation 2,000 5,500
EBIT 18,000 20,500
A) 3.40
B) 1.57
C) 0.11
D) 1.00
E) 0.85
B
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