Cain Company and Abel Corporation Have the Following Income Statements

Multiple Choice

Cain Company and Abel Corporation have the following income statements for the current year: $$\begin{array} { l r r } & \text { Cain Company } & \text { Abel Corporation } \\\hline \text { Sales } & \$ 50,000 & \$ 50,000 \\\text { Variable expenses } & 10,000 & 25,000 \\\text { Contribution margin } & \$ 40,000 & \$ 25,000 \\\text { Fixed expenses } & 25,000 & 10,000 \\\text { Operating income } & \$ 15,000 & \$ 15,000\end{array}$$ What is the degree of operating leverage for Cain Company for the current year?

A) 2.667
B) 0.375
C) 1.667
D) 1.250