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During the last accounting period, Blossom Corporation sold 80000 units at $45 each. The variable cost per unit was $20 per u

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Answer #1

Contribution margin = Sales revenue - Variable costs

= (80,000*45) - (80,000*20)

= 2,000,000

Operating income = Contribution margin - Fixed cost

= 2,000,000 - 1,100,000

= 900,000

Degree of operating leverage = Contribution margin/Operating income

= 2,000,000/900,000

= 2.22

Option B is the answer

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