Wham Company Sells Electronic Squirrel Repellants for $60

question 123

Multiple Choice

Wham Company sells electronic squirrel repellants for $60. Variable costs are 60% of sales and total fixed costs are $40,000. What is the firm's magnitude of operating leverage if 2,000 units are sold?

• A) 0.17
• B) 6.0
• C) 2.25
• D) none of these

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Definitions:

Consideration

In contract law, something of value that is given by each party to a contract to induce them to enter into the agreement.

Negligence

Failure to take reasonable care to avoid causing injury or loss to another person, resulting in legal liability for any resulting damages.

Utility Costs

Expenses associated with services such as electricity, water, gas, and sewage required for the operation of a home or business.

Lease Modification

Changes made to the terms of a lease agreement, often involving negotiations between the lessee and lessor.