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Light Me Up Lamps has variable expenses of 40​% of sales and monthly fixed expenses of . The monthly target operating income is . What is Light Me Up​ Lamps' operating leverage factor at the target level of operating​ income?

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Answer: B. 3.25

Explanation:

Operating Leverage enables a company know how much their income will increase by if they manage to increase their revenue.

The formula is;

= Contribution Margin / Net Income

[tex]\frac{Fixed Costs + Net Income}{ Net Income} \\= \frac{80,000 + 180,000}{80,000} \\= 3.25[/tex]

= 3.25

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