Monroe Corporation Currently Sells 150,000 Units a Year at a Price

Multiple Choice

Monroe Corporation currently sells 150,000 units a year at a price of $4.00 a unit. Its variable costs are approximately 30% of sales, and its fixed costs amount to 50% of revenues at its current output level. Although fixed costs are based on revenues at the current output level, the cost level is fixed. What is Marcus's degree of operating leverage in sales dollars?

A) 3.6750
B) 3.5000
C) 3.3250
D) 3.8588
E) 3.1588