The Lincoln Mint Produces Various Types of One Ounce Silver

Multiple Choice

The Lincoln Mint produces various types of one ounce silver commemorative medals for sale to collectors. The cost of producing and selling a given medal is as follows: $\begin{array}{lr}\text { Fixed costs: }\\\text { Design and preparation of dies } & \$ 8,000 \\\text { Promotion and selling expenses } & 25,000 \\\text { Administrative overhead } & 7,000 \\\quad \text { Total } & \$ 40,000 \\\text { Variable costs: }\\\text { Silver blanks } & \$ 6.00 \\\text { Striking medals } & 0.50 \\\text { Mailing expenses } & 3.50\\\text { Total }&\$10.00\\\\\text { Projected selling price: }&\$14.00\end{array}$
What is the degree of operating leverage at an output level of 15,000 units?

A) 0.0
B) 1.0
C) 3.0
D) cannot be determined from the information provided