1) Profit sensitivity and degree of operating leverage are used interchangeably.

True

False

2) Select ALL that apply. The choice to automate the factory:

A) is an example of moving variable costs such as direct labor to fixed costs such as depreciation on equipment.

B) will change the cost structure of a company.

C) will result in the company being more leveraged.

3) The make up of your cost structure is not "good" or "bad". But there are optimal levels of performance based on expectations of sales.

True

False