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Blue Corporation has variable expenses equal to 35% of sales and monthly fixed costs of $20,000. The company has a target operating income of $5,000. What is Blue Corporation's operating leverage factor at the target level of operating income?

Blue Corporation has variable expenses equal to 35% of sales and monthly fixed costs of $20,000. The company has a target operating income of $5,000. What is Blue Corporation's operating leverage factor at the target level of operating income?

Managerial Accounting
Managerial Accounting
15th Edition
ISBN:9781337912020
Author:Carl Warren, Ph.d. Cma William B. Tayler
Publisher:Carl Warren, Ph.d. Cma William B. Tayler
Chapter7: Variable Costing For Management analysis
Section: Chapter Questions
Problem 16E
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Blue Corporation has variable expenses equal to 35% of sales and monthly fixed costs of $20,000. The company has a target operating income of $5,000. What is Blue Corporation's operating leverage factor at the target level of operating income?
Transcribed Image Text:Blue Corporation has variable expenses equal to 35% of sales and monthly fixed costs of $20,000. The company has a target operating income of $5,000. What is Blue Corporation's operating leverage factor at the target level of operating income?
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