Mark Company, Inc

question 163

Multiple Choice

Mark Company, Inc. sells electronics. The company generated sales of $45,000. Contribution margin is $20,000 and net income is $4,000. Based on this information, the magnitude of operating leverage is:

• A) 2.25 times
• B) 11.25 times
• C) 5 times
• D) 6.25 times

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Definitions:

Drive-Reduction Theory

A theory that explains motivation as being based on the goal of eliminating uncomfortable states.

Clark Hull

An American psychologist known for his drive reduction theory, which suggests that human motivation arises from the desire to reduce drives like hunger or thirst.

State Of Arousal

A condition of the nervous system characterized by heightened sensory awareness and readiness for action.

Primary Drives

Basic, innate motivations that are essential for survival, such as hunger, thirst, and the need for sleep.