The Richard Company Has an Operating Leverage of 2

question 105

Multiple Choice

The Richard Company has an operating leverage of 2.Sales for 2011 are $100,000 with a contribution margin of $50,000.Sales are expected to be $150,000 in 2012.Operating income for 2012 can be expected to increase by what amount over 2011?

• A) $25,000
• B) 200%
• C) $50,000
• D) 40%

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Definitions:

Tunica Intima

The innermost layer of a blood vessel, composed of endothelial cells, providing a smooth lining for blood flow.

Artery Wall

The layered structure of an artery, composed of an inner endothelium, a middle muscular layer, and an outer connective tissue.

Vasa Vasorum

Small vessels distributed to the outer and middle coats of larger blood vessels.

Arteries

Blood vessels that carry blood away from the heart to various parts of the body.