Based on Scenario C, Which of the Following Findings Presents

question 70

Multiple Choice

Based on Scenario C, which of the following findings presents an opportunity for Greener Maids?

• A)More and more homeowners are concerned about the environment.
• B)Compared to competitors, the management team of Greener Maids is by far the best in the industry.
• C)Greener Maids has fallen behind in staff training.
• D)New regulations have been passed limiting the hours employees can work without benefits.
• E)The finance department of Greener Maids has gained access to additional funds.

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Definitions:

Operating Leverage

A measure of how sensitive a company's operating income is to a change in its revenues, indicating the proportion of fixed costs in the company's cost structure.

Contribution Format Income Statement

An income statement format that separates fixed costs from variable costs, thus showing the contribution margin.

Degree of Operating Leverage

A financial ratio that measures the sensitivity of a company's operating income to its sales, indicating how revenue growth translates into growth in operating income.

Variable Expenses

Costs that change in proportion to the level of business activity or production volume.