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Yellow Company's variable expenses are 40% of sales and have monthly fixed expenses of $15,000. The monthly target operating income is $3,750. What is Yellow Company's operating leverage factor at the target level of operating income? A) 5.00 B) 0.20 C) 3.00 D) 1.25

Yellow Company's variable expenses are 40% of sales and have monthly fixed expenses of $15,000. The monthly target operating income is $3,750. What is Yellow Company's operating leverage factor at the target level of operating income? A) 5.00 B) 0.20 C) 3.00 D) 1.25

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Yellow company variable expenses are 40% of sales solution this accounting questions

Yellow Company's variable expenses are 40% of sales and have monthly fixed expenses of $15,000. The monthly target operating income is $3,750. What is Yellow Company's operating leverage factor at the target level of operating income? A) 5.00 B) 0.20 C) 3.00 D) 1.25
Transcribed Image Text:Yellow Company's variable expenses are 40% of sales and have monthly fixed expenses of $15,000. The monthly target operating income is $3,750. What is Yellow Company's operating leverage factor at the target level of operating income? A) 5.00 B) 0.20 C) 3.00 D) 1.25
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