The following information relates to Jenny Corporation: sales revenue $18,000,000; contribution margin $5,800,000; and net income $900,000. The operating leverage factor for Jenny Corporation is:
A)0.155.
B)0.310.
C)0.500.
D)2.000.
E)6.444.

Question

Quizplus · Accepted Answer

The operating leverage factor is calculated as the contribution margin divided by the net income. For Jenny Corporation, it is $5,800,000 / $900,000 = 6.444.

The Following Information Relates to Jenny Corporation: Sales Revenue $18,000,000;