Sales of Blistre Autos Are 380,000, Variable Cost Is 230,000

question 51

Multiple Choice

Sales of Blistre Autos are 380,000, variable cost is 230,000, fixed cost is 90,000 tax rate is 40%. Calculate the operating leverage of the company.

• A) 1.50 times
• B) 4.17 times
• C) 1.53 times
• D) 2.50 times

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Definitions:

Trading Securities

Financial instruments that are purchased by a company not for long-term investment but rather with the intention to trade in the short term for profit.

Unrealized Holding

Gains or losses on investments that a company has not sold yet and hence are not recorded in the financial statements.

Fair Value

The price that would be received for selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.

Debt Securities

Financial instruments representing a loan made by an investor to a borrower, typically featuring fixed terms, including interest payments and future repayment of principal.