The Solemn Company Has an Operating Leverage of 2

question 29

Multiple Choice

The Solemn Company has an operating leverage of 2. Sales for 2016 are $100,000 with a contribution margin of $50,000. Sales are expected to be $150,000 in 2017. Operating income for 2017 can be expected to increase by what amount over 2016?

• A) $50,000
• B) $25,000
• C) 200%
• D) 40%

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Definitions:

Bipolar Depression

A phase of bipolar disorder characterized by depressive symptoms, including persistent sadness, hopelessness, and lack of interest in activities.

Dopamine Activity

The biochemical actions related to dopamine, a neurotransmitter involved in many functions including mood regulation, motivation, and reward perception.

Bipolar Disorders

Mental health conditions characterized by extreme mood swings, including emotional highs (mania or hypomania) and lows (depression).

GABA Depletion

A condition where there is a decrease in gamma-aminobutyric acid, a key neurotransmitter in the brain associated with regulating nervous system excitability.