Alpha Corporation reported the following data for its most recent year: sales, $1,000,000; variable expenses, $600,000; and fixed expenses, $300,000.The company's degree of operating leverage is closest to:

A) 0.25
B) 2.0
C) 4.0
D) 3.3

Degree of Operating Leverage

A financial ratio that measures the sensitivity of a company's operating income to its sales, indicating how revenue growth translates into growth in operating income.

Variable Expenses

Costs that change in proportion to the level of business activity or production volume.

Fixed Expenses

Costs that do not fluctuate with changes in production level or sales volume, remaining constant over a period.