Which of the Following Is True of Operating Leverage? A Operating

question 86

Short Answer

Which of the following is true of operating leverage? a. Operating leverage increases as profit increases.
B) Companies with higher operating leverage experience higher increases in profit when sales increase.
C) Operating leverage decreases as total variable costs decrease.
D) New technology generally decreases operating leverage.

---

Definitions:

Limited Life

A concept depicting that an entity or asset has a finite operational life or duration of existence.

Partnership

A legal business structure where two or more individuals agree to manage and operate a business in accordance with the terms and objectives set out in a Partnership Agreement.

According to Investments

A categorization or analysis based on different types of investments, though "According to Investments" is not a standard accounting term.

Accumulated Depreciation

The total amount of depreciation expense that has been recorded against a fixed asset since it was put into use.