Mark Smith Company Below Is an Income Statement for Mark

question 109

Multiple Choice

Mark Smith Company Below is an income statement for Mark Smith Company:
$\begin{array}{ll}\text { Sales } & \$ 400,000 \\\text { Variable costs } & (\underline{200,000}) \\\text { Contribution margin } & \$ 200,000 \\\text { Fixed costs } & (\underline{125,000}) \\\text { Profit before taxes }& \underline{\$ 75,000}\end{array}$ Refer to Mark Smith Company.What is the company's degree of operating leverage (DOL) ?

• A)2.67
• B)3.2
• C)5.33
• D)10.67

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Definitions:

Class Stratification

The division of society into classes based on wealth, education, occupation, and other social markers, leading to inequality.

Earn Cents

A colloquial expression emphasizing the act of making money, usually in small amounts.

Dollar

The primary currency unit used in the United States, marked by the symbol $ and known as a standard measurement in international financial transactions.

Token Woman

A woman in a predominantly male environment included to prevent criticism and give the appearance of gender equality.