Forde Co Has an Operating Leverage of 4

question 24

Multiple Choice

Forde Co. has an operating leverage of 4. Sales are expected to increase by 12% next year. Operating income is

• A) unaffected
• B) expected to increase by 3%
• C) expected to increase by 48%
• D) expected to increase by 4%

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Definitions:

Product Line

A group of related products marketed under a single brand by the same company.

Sun Protection

Measures or products designed to safeguard the skin from the harmful effects of the sun's UV rays.

Sunscreens

Products applied to the skin to protect against harmful effects of the sun's ultraviolet rays.

Unsought Product

Products that consumers do not normally think of buying or do not know about, often requiring aggressive selling and marketing strategies.