Please give me answer Accounting question Julia's Catering has a monthly target operating incomeof $6,000. Variable expenses are 40% of sales andmonthly fixed expenses are $3,600. What is Julia'soperating leverage factor at the target level of operatingincome?a. 0.40b. 1.60c. 2.67d. 0.63

Step 1: Define Operating LeverageOperating leverage is used to measure on how risky, sensitive, or…

Answered: Julia's Catering has a monthly target…

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter14: Capital Structure Management In Practice

Section: Chapter Questions

Problem 11P

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Julia's Catering has a monthly target operating income of $6,000. Variable expenses are 40% of sales and monthly fixed expenses are $3,600. What is Julia's operating leverage factor at the target level of operating income? a. 0.40 b. 1.60 c. 2.67 d. 0.63