Operating Leverage. High operating leverage means:

1. The company has relatively high fixed costs.

2. The company has relatively low fixed costs.

3. The company will have to sell fewer units than a comparable company with low operating leverage to break even.

4. The company will have to sell more units than a comparable company with low operating leverage to break even.

5. Both (2) and (3) are correct.

6. Both (1) and (4) are correct.