Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Not yet answered Marked out of 0.60 Question 21 Which of the following statements about operating leverage is false? All of the given answers are

image text in transcribed
Not yet answered Marked out of 0.60 Question 21 Which of the following statements about operating leverage is false? All of the given answers are true. b. if the degree of operating leverage higher for a company, this means that the company is more risky than another company with low degree of operating leverage. Keeping all factors constant, the higher the contribution margin, the higher the operating leverage. d. The degree of operating leverage is higher for companies with higher fixed costs e. Operating leverage measures how operating income will be affected by changes in sales Clear my choice Question 22 Not yet answered Marked out of 0.60 Which of the following statements about margin of safety is false? a. If only the fixed costs decrease but the number of units sold and unit selling price and unit variable cost are all constant, the margin of safety increases b. Margin of safety measures the difference between budgeted revenues and breakeven revenues c. none of the given answers is false, d. If only the fixed costs increase but the number of units sold and unit selling price and unit variable cost are all constant, the margin of safety decreases. e. if the variable cost per unit decreases but the number of units sold, unit selling price and total fixed cost are all constant, the margin of safety decreases Clear my choice

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image_2

Step: 3

blur-text-image_3

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Audit Planning A Risk Based Approach

Authors: K. H. Spencer Pickett

1st Edition

047169052X, 978-0471690528

More Books

Students also viewed these Accounting questions

Question

2. Describe how technology can impact intercultural interaction.

Answered: 1 week ago