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Match the Term with the Correct Definition

question 33

Multiple Choice

Match the term with the correct definition.
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Definitions:

Degree of Operating Leverage

The degree of operating leverage is a financial ratio that measures the sensitivity of a company's operating income to its sales, indicating how earnings before interest and taxes are affected by sales volume.

Fixed Expenses

Costs that do not vary with the level or amount of goods or services produced or sold.

Contribution Margin

The difference between sales revenue and variable costs, used to cover fixed costs and profits.

Fixed Expenses

Expenses that remain constant regardless of the amount of output or sales within a brief timeframe, including lease payments, wages, and coverage fees.

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