Marcus Corporation Currently Sells 150,000 Units a Year at a Price

question 81

Multiple Choice

Marcus Corporation currently sells 150,000 units a year at a price of $4.00 a unit.Its variable costs are approximately 30% of sales,and its fixed operating costs amount to 50% of revenues at its current output level.Although fixed costs are based on revenues at the current output level,the cost level is fixed.What is Marcus' degree of operating leverage in sales dollars?

• A) 1.0
• B) 2.2
• C) 3.5
• D) 4.0
• E) 5.0

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Definitions:

Situation Assessment

The process of evaluating the current state of a situation to identify opportunities, challenges, and factors that could influence decision making.

Sales Forecasting

The process of estimating future sales volumes based on historical sales data, market analysis, and current sales trends to guide business planning and budgeting.

Corporate-Level Strategy

Strategic approaches focused on the overall scope and direction of a corporation, deciding on business units, diversification, and market positioning.

Portfolio

A collection of investments, projects, or products held by an individual or an organization, designed to reduce risk and maximize returns.