Use the Below Information to Answer the Following Question Refer to the Table

question 41

Multiple Choice

Use the below information to answer the following question.
$\begin{array}{ll} \text {Sales (1,000 units) }&\$200,000\\ \text {Variable costs }&110,000\\\text { Contribution margin } & 90,000 \\\text { Fixed manufacturing costs } & 40,000\\\text { Operating income } & 50,000 \\\text { Interest } & 10,000\\\text { Earnings before taxes } & 40,000 \\\text { Taxes }(30 \%) & 12,000\\ \text {Net income }&\$28,000\\ \text {Shares Outstanding }&1,000\\\end{array}$
Refer to the table. The degree of operating leverage (DOL) is ________.

• A) 1.62x
• B) 1.80x
• C) 3.50x
• D) 1.40x

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Definitions:

Cultural Preference

The tendency of individuals or groups to favor certain beliefs, practices, or items because of cultural backgrounds.

Structured Situations

Scenarios or environments where the procedures, rules, and objectives are clearly defined and organized.

Exporting

The activity of selling goods or services produced in one country to buyers in other countries.

Foreign Markets

Markets outside the domestic boundaries of a company's home country where it conducts business activities.