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Blue Company's variable expenses are 50% of sales and have monthly fixed expenses of $20,000. The monthly target operating income is $5,000. What is Blue Company's operating leverage factor at the target level of operating income? A) 4.00 B) 2.50 C) 5.00 D) 1.50

Blue Company's variable expenses are 50% of sales and have monthly fixed expenses of $20,000. The monthly target operating income is $5,000. What is Blue Company's operating leverage factor at the target level of operating income? A) 4.00 B) 2.50 C) 5.00 D) 1.50

Principles of Accounting Volume 2
Principles of Accounting Volume 2
19th Edition
ISBN:9781947172609
Author:OpenStax
Publisher:OpenStax
Chapter3: Cost-volume-profit Analysis
Section: Chapter Questions
Problem 23MC: If a firm has a contribution margin of $78M90 and a net income of $13,700 for the current month,...
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Blue Company's variable expenses are 50% of sales and have monthly fixed expenses of $20,000. The monthly target operating income is $5,000. What is Blue Company's operating leverage factor at the target level of operating income? A) 4.00 B) 2.50 C) 5.00 D) 1.50
Transcribed Image Text:Blue Company's variable expenses are 50% of sales and have monthly fixed expenses of $20,000. The monthly target operating income is $5,000. What is Blue Company's operating leverage factor at the target level of operating income? A) 4.00 B) 2.50 C) 5.00 D) 1.50
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