The Following Is Last Month's Contribution Format Income Statement

question 193

Multiple Choice

The following is last month's contribution format income statement:
What is the company's degree of operating leverage?

• A) 0.125.
• B) 8.0.
• C) 3.0.
• D) 0.333.

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Definitions:

Permanent/Temporary

Describes accounts in financial reporting; permanent accounts show ongoing financial status, while temporary accounts track revenues, expenses, and dividends over a specific period.

Normal Balance

The side (debit or credit) of an account that increases its balance, reflecting the account's role in the accounting equation.

Financial Statement

A formal record of the financial activities and position of a business, individual, or other entity, detailing assets, liabilities, revenue, and expenses over a specific period.

Permanent/Temporary

Used to classify accounts, with permanent accounts being those that carry their balances over into the next fiscal year, and temporary accounts being closed at the end of the fiscal year.