Alpha Corporation Reported the Following Data for Its Most Recent

question 100

Multiple Choice

Alpha Corporation reported the following data for its most recent year: sales, $700,000; variable expenses, $490,000; and fixed expenses, $140,000. The company's degree of operating leverage is closest to:

• A) 10.00
• B) 4.00
• C) 3.00
• D) 3.30

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Definitions:

GDP Deflator

An indicator of the price levels for all newly produced domestic final goods and services within an economy, utilized for transforming nominal GDP into real GDP.

Inflation

A universal surge in prices and a dip in the value of monetary assets.

Real GDP

The measure of a country's economic output adjusted for price changes or inflation.

Value Added

The increase in the value of a product or service as a result of a particular process, excluding the costs of raw materials and energy.