Reference: 08-04
the Following Data Relate to a Company That

question 69

Multiple Choice

Reference: 08-04
The following data relate to a company that produces and sells a travel guide that is updated monthly: $$\begin{array} { | l | l | } \hline \text { Fixed costs: } & \\\hline \text { Copy editing } & \$ 6,000 \\\hline \text { Art work } & 2,000 \\\hline \text { Typesetting } & 72,000 \\\hline & \\\hline \text { Variable costs: } & \\\hline \text { Printing and binding } & \$ 3.20 \text { per copy } \\\hline \text { Bookstore discounts } & 4.00 \text { per copy } \\\hline \text { Salespersons' commissions } & 0.50 \text { per copy } \\\hline \text { Author's royalties } & 2.00 \text { per copy } \\\hline\end{array}$$ Each book sells for $20.00. The company sold 8,000 books in June and 10,000 books in July.
-The degree of operating leverage for July is:

• A)the same as that for June.
• B)lower than that for June.
• C)not determinable.
• D)higher than that for June.