Beemer's Sales Are $400,000, Variable Costs Are 75% of Sales

question 202

Multiple Choice

Beemer's sales are $400,000, variable costs are 75% of sales, and operating income is $50,000. The operating leverage is

• A) 2.5
• B) 7.5
• C) 2.0
• D) 0

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Definitions:

Bond Discount

The variance between a bond's official value and the reduced price at which it is actually sold.

Present Value

Present value is a financial concept that describes the value of an expected income stream determined as of the date of valuation.

Lease Payments

Regular payments made by a lessee to a lessor in exchange for the right to use an asset, such as real estate or equipment.

Bonds Payable

Long-term liabilities representing money owed by an entity to bondholders, to be paid back at a specified future date with interest.