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Contribution margin is divided to operate income to calculate

A. degree of operating leverage

B. degree of change

C. degree of change in margin

D. degree of change in income

Answer: Option A

Solution(By Examveda Team)

Contribution margin is divided to operate income to calculate degree of operating leverage. The Degree of Operating Leverage (DOL) is the leverage ratio that sums up the effect of an amount of operating leverage on the company's earnings before interests and taxes (EBIT).

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