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The project manager makes remarks about the Degree of Operating Leverage (DOL), which one is INACCURATE? A. Operating leverage will be higher if fixed costs
The project manager makes remarks about the Degree of Operating Leverage (DOL), which one is INACCURATE?
A. Operating leverage will be higher if fixed costs are high relative to variable operating costs.
B. Higher costs increase the sensitivity of operating income to changes in sales.
C. DOL decreases as the level of sales increase beyond break-even point
D. Operating leverage magnifies profits and minimizes losses
Can you explain your answer as well?
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