Assume Total Sales of $800,000, Total Variable Costs of $400,000

question 176

Multiple Choice

Assume total sales of $800,000, total variable costs of $400,000, and total fixed costs of $300,000.Of these amounts, $200,000 of the variable costs are product costs, and $100,000 of the fixed costs are period costs.What is the degree of operating leverage?

• A)0.25
• B)8.00
• C)2.00
• D)4.00

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Definitions:

Compound Interest

A method of calculating interest where the interest is added to the principal so that, from that moment on, the interest that has been added also earns interest.

Exponential Decay

A process by which a quantity decreases at a rate proportional to its current value.

Financial Calculation

The process of crunching numbers to determine outcomes related to investments, savings, profitability, and other financial metrics.

Daily Interest

Interest amount that is calculated and accrued on a daily basis, typically used in various financial contexts to determine the amount earned or owed each day.