Degree of Operating Leverage Is Used to

question 88

Multiple Choice

Degree of operating leverage is used to

• A)calculate sales change given profit change.
• B)calculate profit change given sales change.
• C)calculate break-even sales given sales change.
• D)calculate break-even sales given profit change.

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Definitions:

Useful Life

The estimated period over which an asset is expected to be usable, providing economic benefits to its owner.

Straight-Line Method

A depreciation technique where an asset's cost is evenly spread over its useful life, resulting in a consistent annual expense.

Partial-Year Depreciation

Partial-year depreciation is the calculation of depreciation expenses for assets used in part of a year, usually during the first year of purchase or the last year before disposal.

Useful Life

The estimated duration over which an asset is expected to be functional and economically viable.