Marcus Corporation Currently Sells 150,000 Units a Year at a Price

question 81

Multiple Choice

Marcus Corporation currently sells 150,000 units a year at a price of $4.00 a unit.Its variable costs are approximately 30% of sales,and its fixed operating costs amount to 50% of revenues at its current output level.Although fixed costs are based on revenues at the current output level,the cost level is fixed.What is Marcus' degree of operating leverage in sales dollars?

• A) 1.0
• B) 2.2
• C) 3.5
• D) 4.0
• E) 5.0

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