The Mildmanner Corporation Has the Following Data for the Current

question 62

Multiple Choice

The Mildmanner Corporation has the following data for the current year: $\begin{array}{lr}\text { Selling price per unit } & \$15 \\\text { Variable cost per unit } & \$ 9 \\\text { Fixed costs } & \$ 45,000 \\\text { Units sold } & 10,000 \text { units }\end{array}$
If sales decrease to 7,500 units in the current year, Mildmanner's operating leverage will be

• A)0.25.
• B)2.00.
• C)4.00.
• D)undefined.

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Definitions:

Net Income

The remaining profit of a company after expenses and taxes are taken out of its revenue.

Accrued Expense

Costs that have been incurred for goods or services but have not yet been paid for or recorded in the financial statements.

Accrued Revenues

Revenues that have been earned (through the delivery of goods or services) but not yet received in cash or recorded.

Goods

Physical items that are produced or purchased for sale by a business.