The Following Is Last Month's Contribution Format Income Statement What Is the Company's Degree of Operating Leverage?
A)0

question 55

Multiple Choice

The following is last month's contribution format income statement: $$\begin{array} { | l | c | } \hline \text { Sales (8,000 units) } & \$ 800,000 \\\hline \text { Less variable expenses } & 500,000 \\\hline \text { Contribution margin } & 300,000 \\\hline \text { Less fixed expenses } & 200,000 \\\hline \text { Net income } & \$ 100,000 \\\hline\end{array}$$ What is the company's degree of operating leverage?

• A)0.333.
• B)3.000.
• C)0.125.
• D)8.000.

Understand how to modify document formatting utilizing theme colors and layout options.

Understand the functionality of the Line and Paragraph Spacing arrow for adjusting spacing between paragraphs.

Comprehend the process of printing documents and the preliminary steps required before printing.

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Definitions:

Reinvesting Earnings

The practice of using a company's profits to invest back into the business to fund growth, expansion, or improvements rather than distributing it to shareholders as dividends.

Strategic Plan

A document that outlines an organization's long-term goals and the strategies it will use to achieve them.

Time Horizon

The length of time over which an investment or a project is expected to be pursued or a goal to be achieved.

Operating Plan

A detailed description of how a company's operational activities will be carried out to meet goals and objectives, including production, staffing, and inventory requirements.