The Following Income Statement Is Provided for Grant,Inc What Is This Company's Magnitude of Operating Leverage?
A) 0

The following income statement is provided for Grant,Inc. $$\begin{array} { l r } \text { Sales revenue (1,500@\$30per unit) } & \$ 45,000 \\\text { Variable costs } ( 1,500 @ \$ 14 \text { per unit) } & 21,000 \\\text { Fixed costs } & \underline{ 16,000} \\\text { Net incorne }& \underline{\$ 8,000 }\\\end{array}$$ What is this company's magnitude of operating leverage?

A) 0.33
B) 1.31
C) 2.00
D) 3.00

Correct Answer:

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