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:

Adenitis

Inflammation of lymph nodes or a gland.

Lymph Nodes

Small, bean-shaped structures that are part of the body's lymphatic system, crucial in filtering lymph and combating infections.

Tricuspid Valve

A valve in the human heart that lies between the right atrium and the right ventricle, regulating blood flow.

Right Atrium

The upper right chamber of the heart that receives deoxygenated blood from the body and pumps it to the right ventricle.