Ostler Company's net income last year was $10,000 and its contribution margin was $50,000. Using the operating leverage concept, if the company's sales increase next year by 8%, net income can be expected to increase by: A. 16% B. 20% C. 40% D. 160%
Ostler Company's net income last year was $10,000 and its contribution margin was $50,000. Using the operating leverage concept, if the company's sales increase next year by 8%, net income can be expected to increase by: A. 16% B. 20% C. 40% D. 160%
Chapter9: Capital Budgeting And Cash Flow Analysis
Section: Chapter Questions
Problem 20P
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Please provide correct answer accounting question
![Ostler Company's net income last year was $10,000 and its
contribution margin was $50,000. Using the operating leverage
concept, if the company's sales increase next year by 8%, net income
can be expected to increase by:
A. 16%
B. 20%
C. 40%
D. 160%](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F60601582-e926-4865-9864-e740539fab10%2Fcc330848-6c8f-4e8e-8de2-e1ed64607ccc%2Fvzisze8_processed.jpeg&w=3840&q=75)
Transcribed Image Text:Ostler Company's net income last year was $10,000 and its
contribution margin was $50,000. Using the operating leverage
concept, if the company's sales increase next year by 8%, net income
can be expected to increase by:
A. 16%
B. 20%
C. 40%
D. 160%
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