The Degree of Operating Leverage Can Be Measured by ________

question 127

Multiple Choice

The degree of operating leverage can be measured by ________.

• A) dividing the contribution margin by operating income
• B) dividing the fixed costs by the sales price per unit
• C) multiplying the contribution margin by sales revenue
• D) dividing the fixed costs by contribution margin

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Definitions:

Profit-Maximizing Price

The price point at which a business can sell its product or service to generate the maximum net profit.

Panel

A group of selected individuals gathered to discuss, debate, or provide advice on a particular topic or to evaluate submissions in contest or applications.

Long-Run Equilibrium

A state in which all factors of production and outputs are optimally allocated, and economic forces are balanced, leading to no further incentive for change.

Economic Profit

A measure of performance that includes both the tangible and intangible costs associated with doing business, providing a more comprehensive view than traditional profit metrics.