Fancy Furniture Has Variable Expenses of 40% of Sales and Monthly

question 207

Multiple Choice

Fancy Furniture has variable expenses of 40% of sales and monthly fixed expenses of $240,000. The monthly target operating income is $60,000. What is Fancy Furniture's operating leverage factor at the target level of operating income?

• A)0.20
• B)5.00
• C)(3.00)
• D)1.25

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Definitions:

Formative Years

A period of a person's life or an institution's existence that is crucial for development and shaping its future.

Militarily Weak

A descriptive term for a nation or entity that possesses limited military strength and capabilities compared to potential adversaries.

IRA

Individual Retirement Account; a financial tool in the United States for retirement savings with various tax advantages.

ETA

Estimated Time of Arrival; the predicted time when a vehicle, individual, or shipment is expected to reach a particular destination.