Illinois Tool Company's (ITC)fixed Operating Costs Are $1,260,000

question 91

Multiple Choice

Illinois Tool Company's (ITC) fixed operating costs are $1,260,000. Its variable costs average 70% of the price of its products. The firm currently has sales revenue of $9 million per year. What is ITC's degree of operating leverage?

• A)1.60
• B)1.875
• C)3.0
• D)None of the above

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Definitions:

Intuitive Thinking

Thinking that approaches problems in a flexible and spontaneous fashion.

Limited Facts

A situation or condition in which information available is scarce or incomplete, making it difficult to make informed decisions.

Decision Precedents

Are past decisions that serve as a guide or reference for making future decisions in similar situations.

Problem Solvers

Individuals or groups that identify, analyze, and implement solutions for issues or challenges.