Answer the Following Questions Using the Information Below:
the Cybertronics

question 104

Multiple Choice

Answer the following questions using the information below:
The Cybertronics Corporation reported the following information for its Cyclotron Division:
$$\begin{array} { l r } \text { Revenues } & \$ 2,000,000 \\\text { Operating costs } & 1,200,000 \\\text { Operating assets } & 1,000,000\end{array}$$ Income is defined as operating income.
-What is the Cyclotron Division's return on sales?

• A) 20%
• B) 40%
• C) 50%
• D) 60%

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Definitions:

Fixed Costs

Expenses that do not change with the level of goods or services produced by a business over a certain period.

Operating Leverage

A financial ratio that measures the proportion of fixed costs to variable costs in a company's cost structure, indicating how revenue growth translates into growth in operating income.

EPS Variability

Fluctuations in a company's earnings per share over time, indicating the volatility of its profitability.

Operating Leverage

A measure of how revenue growth translates into growth in operating income, indicating the fixed versus variable costs structure of a business.