The Rocky Company Reports the Following Data: Sales

question 173

Multiple Choice

The Rocky Company reports the following data: Sales
$800,000
Variable costs
300,000
Fixed costs
120,000
Rocky Company's operating leverage is

• A) 6.7
• B) 2.7
• C) 1.0
• D) 1.3

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Definitions:

Franchisee

An individual or company that has been granted the right by a franchisor to use a specific business trademark, model, or formula in a particular location.

Royalties

Payments made to the owners of intellectual property, such as authors and inventors, for the use of their work.

Franchising

A business model that allows individuals or entities to operate a branch of an established company with its brand and business strategy.

U.S. Businesses

Companies or enterprises that are located within the United States of America and are subject to its regulations and economic policies.