The degree of operating leverage used in CVP analysis is highest for firms with high

a) conversion costs

b) opportunity costs

c) prime costs

d) sunk costs

e) fixed costs

2. Which of the following statement is true?

a) The term contribution margin appears in the income statement prepared using the absorption costing approach

b) Fixed manufacturing overhead is treated as a period cost under absorption costing method

c) Absorption costing method is more useful than variable costing approach in managerial accounting and internal decision-making purposes

d) Variable costing method is used in external financial reporting

e) Fixed manufacturing overhead is treated as a product cost under absorption costing method