Calculating Operating Leverage

question 28

Multiple Choice

Calculating operating leverage. Coach K Sneakers, Inc., had EBIT of $1,850 last year with fixed costs equal to $500 (depreciation and amortization not included) and depreciation and amortization equal to $150. What was Coach K's degree of accounting operating leverage?

• A) 1.25
• B) 1.35
• C) 1.38
• D) 1.40

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Definitions:

Uterine Lining

The layer of cells that lines the uterus, which thickens during the menstrual cycle in preparation for possible pregnancy and sheds during menstruation if pregnancy does not occur.

Amniotic Membrane

The innermost layer of the placenta that encloses the amniotic cavity, providing a protective environment for the developing fetus.

Fetus

A developing mammal or human from the end of the embryonic stage, marked by rapid growth and the maturation of organs and systems.

Osteoporosis

A bone disease characterized by decreased bone density and strength, resulting in fragile bones and an increased risk of fractures.