The Following Income Statement Is Provided for Grant, Inc What Is This Company's Magnitude of Operating Leverage?
A)0

question 143

Multiple Choice

The following income statement is provided for Grant, Inc. $\begin{array}{|l|c|}\hline \text { Sales revenue }(1,500 @ \$ 30 \text { per unit }) & \$ 45,000\\\hline \text { Variable costs }(1,500 @ \$ 14 \text { per unit }) & 21,000\\\hline \text { Fixed costs } &\underline{16,000} \\\hline \text { Net income } & \$8,000 \\\hline\end{array}$
What is this company's magnitude of operating leverage?

• A)0.33
• B)1.31
• C)2.00
• D)3.00

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Definitions:

Monetary Unit Assumption

An accounting principle that assumes transactions and events can be represented in monetary units or currency.

Economic Entity Assumption

An accounting principle that treats a company as a separate entity from its owners for financial reporting purposes.

Business Career

A professional path that involves working in the commercial sector, which may encompass a wide range of roles and industries.

Accounting Study

The systematic and comprehensive recording of financial transactions pertaining to a business, and the process of summarizing, analyzing and reporting these transactions to oversight agencies and tax collection entities.