Operating Leverage Refers to the Extent to Which a Company's

question 63

True/False

Operating leverage refers to the extent to which a company's net income reacts to a given change in fixed costs.

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Definitions:

Inventory

The total amount of goods and materials held by a business for the purpose of resale or production.

Selling Expense

Costs incurred directly and indirectly in making sales, including advertising, shipping, and sales staff salaries.

Goods Sold

The total of merchandise that a company has sold to its customers within a specific period; often referred to as 'sales'.

Perpetual Inventory System

An inventory accounting system that records goods transactions in real-time.