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

question 43

Multiple Choice

Use the information below to answer the following question(s) .
Southwest Electric Co-op has variable expenses of 20% of sales and monthly fixed expenses of $150,000. The monthly target operating income is $50,000.
-What is Southwest Electric Co-op's operating leverage factor at the target level of operating income?

• A) 1.33
• B) 2.00
• C) 4.00
• D) 0.25

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Definitions:

Incorporate

To form into a legal corporation, which involves registering with the state and creates an entity that is legally separate from its owners.

Incorporation Statutes

Laws that govern the formation, operation, and dissolution of corporations.

Special Privileges

Rights or advantages granted to specific individuals or groups, often at the expense or exclusion of others, typically in legal, political, or social contexts.

State Legislatures

The legislative bodies in each of the states within the United States, responsible for making, amending, and repealing state laws.