The following income statement is provided for Vargas, Inc. Sales revenue (2,500 units x $60 per unit) $150,000 Cost of goods sold (variable; 2,500 units × $20 (50,000) per unit) Cost of goods sold (fixed) Gross margin Administrative salaries Depreciation Supplies (2,500 units x $4 per unit) Net income What is this company's magnitude of operating leverage? Multiple Choice 3.07 0.33 3.00 (8,000) 92,000 (42,000) (10,000) (10,000) $ 30,000
The following income statement is provided for Vargas, Inc. Sales revenue (2,500 units x $60 per unit) $150,000 Cost of goods sold (variable; 2,500 units × $20 (50,000) per unit) Cost of goods sold (fixed) Gross margin Administrative salaries Depreciation Supplies (2,500 units x $4 per unit) Net income What is this company's magnitude of operating leverage? Multiple Choice 3.07 0.33 3.00 (8,000) 92,000 (42,000) (10,000) (10,000) $ 30,000
Cornerstones of Financial Accounting
4th Edition
ISBN:9781337690881
Author:Jay Rich, Jeff Jones
Publisher:Jay Rich, Jeff Jones
Chapter12: Fainancial Statement Analysis
Section: Chapter Questions
Problem 87PSB
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Question
![The following income statement is provided for Vargas, Inc.
Sales revenue (2,500 units × $60 per unit)
$150,000
Cost of goods sold (variable; 2,500 units × $20 (50,000)
per unit)
Cost of goods sold (fixed)
Gross margin
Administrative salaries
Depreciation
Supplies (2,500 units x $4 per unit)
Net income
What is this company's magnitude of operating leverage?
Multiple Choice
3.07
0.33
3.00
(8,000)
92,000
(42,000)
(10,000)
(10,000)
$ 30,000](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F7c28e1c4-ae46-491e-a8aa-e58088b6db7e%2F60b7b8c6-d036-441b-8a2f-fa8811b077d0%2F8skezho_processed.png&w=3840&q=75)
Transcribed Image Text:The following income statement is provided for Vargas, Inc.
Sales revenue (2,500 units × $60 per unit)
$150,000
Cost of goods sold (variable; 2,500 units × $20 (50,000)
per unit)
Cost of goods sold (fixed)
Gross margin
Administrative salaries
Depreciation
Supplies (2,500 units x $4 per unit)
Net income
What is this company's magnitude of operating leverage?
Multiple Choice
3.07
0.33
3.00
(8,000)
92,000
(42,000)
(10,000)
(10,000)
$ 30,000
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