Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Which of the following statements about operating leverage is false? O a. Operating leverage measures how operating income will be affected by changes in sales

image text in transcribed

Which of the following statements about operating leverage is false? O a. Operating leverage measures how operating income will be affected by changes in sales O b. Keeping all factors constant, the higher the contribution margin, the higher the operating leverage. Oc. The degree of operating leverage is higher for companies with higher fixed costs O d. All of the given answers are true. O e. If the degree of operating leverage higher for a company, this means that the company is less risky than another company with low degree of operating leverage. Holding other factors constant, a company's contribution margin per unit will increase with: O a. any decrease in the selling price per unit O b. increase in its total fixed costs Oc. All answers given are NOT correct. O d. any increase in quantity sold. O e. any decrease in variable cost per unit

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

Step: 3

blur-text-image

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

Quality Auditor Guide Theory And Application Made Easy

Authors: Warren Alford

1st Edition

1453899774, 978-1453899779

More Books

Students also viewed these Accounting questions