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The Smith Bakery sells a variety of gourmet breads, cakes, and pastries. Although they are...

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Accounting

The Smith Bakery sells a variety of gourmet breads, cakes, and pastries. Although they are more expensive than those available in the supermarkets, they have a loyal customer base that is willing to pay a premium price. On average, Smith Bakery has a monthly revenue of $300,000 and earns a profit of $32,000. Their contribution margin ratio is 20%. What is the operating leverage for Smith Bakery? Round off your answer to four digits.

A. 0.1045

B. 0.8955

C. 0.8933

D. 0.0933

E. 0.1067

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