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

Managerial Accounting

15th Edition

ISBN:9781337912020

Author:Carl Warren, Ph.d. Cma William B. Tayler

Publisher:Carl Warren, Ph.d. Cma William B. Tayler

Chapter7: Variable Costing For Management analysis

Section: Chapter Questions

Problem 16E

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