The Following Income Statement Is Provided for Vargas,Inc What Is This Company's Magnitude of Operating Leverage?
A) 3

question 93

Multiple Choice

The following income statement is provided for Vargas,Inc. $$\begin{array} { l r } \text { Sales reverule (2,500 urits } \times \$ 60 \text { per unit) } & \$ 150,000 \\\text { Cost of goods sold (variable; } 2,500 \text { urits } \times \$ 20 \text { per unit) } & ( 50,000 ) \\\text { Cost of goods sold (fixed) } & \underline{ ( 8,000 ) } \\\text { Gross margin } & 92,000 \\\text { Adrninistrative salaries } & ( 42,000 ) \\\text { Depreciation } & ( 10,000 ) \\\text { Supplies } ( 2,500 \text { urits } \times \$ 4 \text { per unit) } & \underline{( 10,000 ) } \\\text { Net income } & \underline{ \$ 30,000} \\\end{array}$$ What is this company's magnitude of operating leverage?

• A) 3.07
• B) 0.33
• C) 3.00
• D) 1.67

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Definitions:

Suspensory Ligaments

Connective tissue fibers that hold an organ in place or in some instances, like the lens of the eye, change its shape during accommodation.

Pelvis

The lower part of the torso, located between the abdomen and the thighs, that houses the reproductive organs and part of the digestive tract.

Uterus

A female reproductive organ in which the fertilized egg implants and develops into a fetus.

Cervix

The lower part of the uterus that opens into the vagina, involved in dilation during childbirth.