Based on the Income Statements Shown Below, Which Division Has

Multiple Choice

Based on the income statements shown below, which division has the cost structure with the highest operating leverage? $$\begin{array} { | l | c | c | c | } \hline & \text { Soft Drinks } & \text { Bottled Water } & \text { Fruit Juices } \\\hline \text { Revenue } & \$ 50,000 & \$ 50,000 & \$ 50,000 \\\hline \text { Variable costs } & ( 10,000 ) & ( 5000 ) & ( 30,000 ) \\\hline \text { Contribution margin } & 40,000 & 45,000 & 20,000 \\\hline \text { Fixed costs } & ( 30,000 ) & ( 40,000 ) & ( 10,000 ) \\\hline \text { Net income } & \$ 10,000 & \$ 5,000 & \$ 10,000 \\\hline\end{array}$$

A) Bottled Water.
B) Fruit Juices.
C) Soft Drinks.
D) The three divisions have identical operating leverage.