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MC Question 11

The following are extracts from the statement of profit or loss of CQB Co:

$000
Sales income 60,000
Cost of sales 50,000

Profit before interest and tax 10,000
Interest 4,000

Profit before tax 6,000
Tax 4,500
Profit after tax
1,500

60% of the cost of sales is variable costs.

What is the operational gearing of CQB Co?

A. 5·0 times
B. 2·0 times
C. 0·5 times
D. 3·0 times