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