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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

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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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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