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MC Question 7
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 variables 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