Assume Total Sales of $600,000,total Variable Costs of $400,000,total Fixed

question 56

Multiple Choice

Assume total sales of $600,000,total variable costs of $400,000,total fixed costs of $100,000,product costs of $200,000,and period costs of $300,000.What is the degree of operating leverage?

• A).50
• B).67
• C)1.5
• D)2

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Definitions:

Special Order

A special order refers to a one-time order that is outside the scope of regular production or services, often requiring a unique pricing and decision-making process.

Annual Financial Advantage

The financial benefits or savings realized by a company over the course of a year, often resulting from efficiencies, investments, or strategic decisions.

Outside Supplier

A third-party company that provides goods or services to another company, as opposed to the company producing these items in-house.

Purchase Subcomponent

The act of buying parts or elements that will be used to assemble a final product.