Modern Lights has variable expenses equal to 45% of sales and monthly fixed expenses of $180,000. The company has set a monthly target operating income of $45,000. What is Modern Lights' operating leverage factor at the target level of operating income?

Modern Lights has variable expenses equal to 45% of sales and monthly fixed expenses of $180,000. The company has set a monthly target operating income of $45,000. What is Modern Lights' operating leverage factor at the target level of operating income?

Cornerstones of Cost Management (Cornerstones Series)

4th Edition

ISBN:9781305970663

Author:Don R. Hansen, Maryanne M. Mowen

Publisher:Don R. Hansen, Maryanne M. Mowen

Chapter16: Cost-volume-profit Analysis

Section: Chapter Questions

Problem 36P: Faldo Company produces a single product. The projected income statement for the coming year, based...

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Please provide the correct answer to this general accounting problem using valid calculations.

Modern Lights has variable expenses equal to 45%
of sales and monthly fixed expenses of $180,000.
The company has set a monthly target operating
income of $45,000. What is Modern Lights'
operating leverage factor at the target level of
operating income?

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