Check out some similar questions!

ParrotBird48516 · Jun 27, 2012, 05:51 PM

What is the formula for operating leverage please?

I found this on a website:

Operating Leverage = [Quantity x (Price - Variable Cost per Unit)] / Quantity x (Price - Variable Cost per Unit) - Fixed Operating Cost

However the brackets confuse me and my calculations don't seem to match the one on the website's example. It looks like something being divided by the same something (creating 1) and then subtracting something that will give a negative answer!

Please help!

ParrotBird48516 · Jun 27, 2012, 08:16 PM

Originally Posted by ParrotBird48516

What is the formula for operating leverage please?

I found this on a website:

Operating Leverage = [Quantity x (Price - Variable Cost per Unit)] / Quantity x (Price - Variable Cost per Unit) - Fixed Operating Cost

However the brackets confuse me and my calculations don't seem to match the one on the website's example. It looks like something being divided by the same something (creating 1) and then subtracting something that will give a negative answer!

Please help!

I worked it out in the end! Thanks!

paraclete · Jun 28, 2012, 02:34 AM

I would like it all to be this easy

ParrotBird48516 · Jun 28, 2012, 07:17 AM

So would I paraclete! Took my time and didn't over-think!!