The following income statement is provided for Vargas, Inc. Sales revenue (2,500 units × $60 per unit)$150,000 Cost of goods sold (variable; 2,500 units × $20 per unit) (50,000)Cost of goods sold (fixed) (8,000)Gross margin 92,000 Administrative salaries (42,000)Depreciation (10,000)Supplies (2,500 units × $4 per unit) (10,000)Net income$30,000 What is this company's magnitude of operating leverage?
A. 3.00
B. 1.67
C. 3.07
D. 0.33
Answer: A
Business
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