Peterson Company and Olson Corporation Have the Following Income Statements

question 31

Multiple Choice

Peterson Company and Olson Corporation have the following income statements for the current year: $\begin{array}{lcc}& \underline{\text { Peterson Company}}& \underline{\text { Olson Corporation }}\\\text { Sales } & \$ 50,000 & \$ 50,000 \\\text { Variable expenses } &\underline{ 10,000 }&\underline{ 25,000} \\\text { Contribution margin } & \$ 40,000 & \$ 25,000 \\\text { Fixed expenses } & \underline{25,000} & \underline{10,000 }\\\text { Operating income } & \underline{\$ 15,000} &\underline{ \$ 15,000} \\\end{array}$
What is the degree of operating leverage for Peterson Company for the current year?

• A)0.375
• B)1.250
• C)1.667
• D)2.667

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Definitions:

Cognitive Distortion

Faulty or biased ways of thinking that are believed to contribute to emotional distress and mental health disorders.

Verbal Abuses

The use of words to cause harm to the person being spoken to; it involves harmful, derogatory, or demeaning language.

Poor Childrearing

Inadequate or harmful parenting practices that negatively affect a child's development and well-being.

Increasingly Aggressive

Describes behavior or conditions that are becoming more forceful, hostile, or assertive over time, often used in the context of diseases or personal interactions.