Use the Information Below to Answer the Following Question(s)

question 182

Multiple Choice

Use the information below to answer the following question(s) .
Ava's Fruit Cups has a monthly target operating income of $5,425. Variable expenses are 30% of sales and monthly fixed expenses are $9,800.
-What is Ava's operating leverage factor at the target level of operating income?

• A) 0.55
• B) 0.36
• C) 2.8
• D) 1.8

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Definitions:

Cash Flow

The complete sum of funds moving into and out of a company, particularly influencing its ability to meet short-term obligations.

Merger

A strategic move where two or more companies combine their operations, assets, and financials into a single entity, often to expand market share or capabilities.

Mutual Funds

Investment vehicles that pool money from various investors to purchase a diversified portfolio of stocks, bonds, or other securities.