The Degree of Operating Leverage

question 109

Multiple Choice

The degree of operating leverage

• A) does not provide a reliable measure of a company's earnings volatility.
• B) cannot be used to compare companies.
• C) is computed by dividing total contribution margin by net income.
• D) measures how much of each sales dollar is available to cover fixed expenses.

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Definitions:

Apprenticeship Programs

These are formalized training programs that combine on-the-job training with classroom instruction, usually sponsored by employers or labor unions, to prepare individuals for skilled trades.

Classroom Lectures

A traditional educational method where an instructor provides a presentation or talk to a group of students in a classroom setting.

Performance Appraisals

The systematic evaluation of the performance of employees and to understand the abilities of a person for further growth and development.

Corporate Outsourcing

The practice of hiring external firms or individuals to handle business activities or services that could be performed internally, often to reduce costs or improve efficiency.