The Smith Corporation Has the Following Data for the Current

question 1

Multiple Choice

The Smith Corporation has the following data for the current year: $$\begin{array} { l l } \text { Selling price per unit } & \$ 15 \\\text { Variable cost per unit } & \$ 9 \\\text { Fixed costs } & \$ 45,000 \\\text { Units sold } & 10,000 \text { units }\end{array}$$ If sales decrease to 7,500 units in the following year,what will be Smith's operating leverage?

• A)0.25
• B)2.00
• C)4.00
• D)undefined

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