Reference: 08-02
the Following Is Allison Corporation's Contribution Format Income

question 111

Multiple Choice

Reference: 08-02
The following is Allison Corporation's contribution format income statement for last month: $$\begin{array} { | l | c | } \hline \text { Sales } & \$ 800,000 \\\hline \text { Less variable expenses } & 300,000 \\\hline \text { Contribution margin } & 500,000 \\\hline \text { Less fixed expenses } & 400,000 \\\hline \text { Net income } & \$ 100,000 \\\hline\end{array}$$ The company has no beginning or ending inventories. The company produced and sold 10,000 units last month.
-What is the company's degree of operating leverage?

• A)0.2.
• B)1.7.
• C)8.0.
• D)5.0.

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Definitions:

Statement of Changes

Short for the Statement of Changes in Equity; it details the movements in owners' equity over a specific period.