Stromburg Corporation Makes Surveillance Equipment for Intelligence Organizations

question 29

Multiple Choice

Stromburg Corporation makes surveillance equipment for intelligence organizations. Its sales are $75,000,000. Fixed costs, including research and development, are $40,000,000, while variable costs amount to 30% of sales. Stromburg plans an expansion which will generate additional fixed costs of $15,000,000, decrease variable costs to 25% of sales, and also permit sales to increase to $100,000,000. What is Stromburg's degree of operating leverage at the new projected sales level?

• A) 3.7500
• B) 4.5581
• C) 4.3411
• D) 4.1344
• E) 3.9375

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Definitions:

Performance Goals

Specific, measurable objectives set for individuals or teams to achieve in order to assess and improve performance.

Cultural Competencies

The ability to understand, appreciate, and interact with people from cultures or belief systems different from one's own, especially relevant in healthcare.

Reflective Communication

An interactive communication process in which the receiver uses verbal “mirroring” to restate what the sender has said for optimal clarification by all parties.

Verbal "Mirror"

A communication technique where a speaker repeats or paraphrases what another person has said to confirm understanding or empathy.