expedia provides travel services on the Internet. In the first quarter of 2019, Texpedia reported an operating income of $4 million on sales revenue of $60 million. In the second quarter of 2019, sales revenue had increased to $80 million, and Texpedia had an operating income of $20 million. Assume that total fixed costs and the contribution margin % were the same during both quarters of the year.

12) Texpedia's contribution margin % is

1. 60%
2. 70%
3. 50%
4. 80%

13) Texpedia's Break-even revenue is

1. $40 million
2. $50 million
3. $55 million
4. $70 million

14) Texpedia's operating leverage for the second quarter is

1. 5.0
2. -3.5
3. 3.2
4. 4.4

15) Consider a company whose current cost structure generates a contribution margin ratio of 60% on revenue. The current break-even revenue is $1,200,000. By increasing its fixed costs by $90,000 this company can increase its contribution margin ratio to 75%. If the company implements this change the new break-even revenue will be:

1. $900,000
2. $1,080,000
3. $1,100,000
4. $820,000