J&A Corporation Has a Monthly Target Operating Income of $57,600

question 43

Multiple Choice

J&A Corporation has a monthly target operating income of $57,600. Variable expenses are 10% of sales and monthly fixed expenses are $14,400. What is J&A's operating leverage factor at the target level of operating income?

• A)0)20
• B)1)25
• C)0)60
• D)5)00

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Definitions:

Ratio

A comparison, by division, of the relative size of two or more quantities.

Proportion

A statement of the equality of two ratios.

Direct Labour

The cost of wages for employees who directly manufacture or produce goods and services.

Raw Materials

The basic materials from which a product is made, often referred to in the context of manufacturing and production industries.