Reference: 08-02
the Following Is Allison Corporation's Contribution Format Income

Reference: 08-02
The following is Allison Corporation's contribution format income statement for last month: $$\begin{array} { | l | c | } \hline \text { Sales } & \$ 800,000 \\\hline \text { Less variable expenses } & 300,000 \\\hline \text { Contribution margin } & 500,000 \\\hline \text { Less fixed expenses } & 400,000 \\\hline \text { Net income } & \$ 100,000 \\\hline\end{array}$$ The company has no beginning or ending inventories. The company produced and sold 10,000 units last month.
-What is the company's degree of operating leverage?

A) 0.2.
B) 1.7.
C) 8.0.
D) 5.0.

Correct Answer:

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