A Firm Has Fixed Operating Costs of $650,000, a Sales

question 101

Multiple Choice

A firm has fixed operating costs of $650,000, a sales price per unit of $20, and a variable cost per unit of $13. At a base sales level of 500,000 units, the firm's degree of operating leverage is_________.

• A) 1.11
• B) 1.23
• C) 1.07
• D) 1.18

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Definitions:

Eidetic Imagery

A rare ability to recall images, sounds, or objects in memory with high precision for a few minutes without using mnemonic devices.

Analogy

A comparison between two things, typically on the basis of their structure and for the purpose of explanation or clarification.

Retention

The ability to remember and store information over time, often measured in terms of duration and capacity.

Period Of Time

A specific duration marked by a beginning and an end, measured in units such as seconds, minutes, hours, or years.