Given the Following Information, What Is the Degree of Operating

question 365

Multiple Choice

Given the following information, what is the degree of operating leverage? Price = $40 per unit; variable cost = $20 per unit; fixed costs = $95,000 per year; depreciation = $35,000 per year; sales = 10,000 units per year. Ignore tax effects.

• A) 0.9
• B) 1.3
• C) 1.5
• D) 1.9
• E) 2.4

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Definitions:

Unpredictable

The characteristic of being impossible to foresee or predict with certainty due to variable or unknown factors.

Organizational Behavior

The study of how people interact within groups in a workplace setting, primarily focused on improving organizational efficiency, effectiveness, and employee well-being.

Motivations

The reasons or driving forces behind an individual's actions, desires, and needs.

Psychological Theories

Theoretical perspectives and explanations for human behavior and mental processes developed through psychological research.