If Sales Are $400,000, Variable Costs Are 80% of Sales

question 93

Multiple Choice

If sales are $400,000, variable costs are 80% of sales, and operating income is $40,000, what is the operating leverage?

• A) 0.0
• B) 7.5
• C) 2.0
• D) 1.3

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Definitions:

Foot-In-The-Door Technique

A persuasion strategy where one starts with a small request to increase the likelihood of gaining compliance with a larger request later.

Billboard

A large outdoor board for displaying advertisements, typically found alongside busy roads and high-traffic areas.

Candidate

An individual who is considered for a particular position or role, often in elections, job positions, or other competitive environments.

Foot-In-The-Door Technique

A compliance strategy that involves getting a person to agree to a small request to increase the likelihood of agreeing to a larger request later.