The Degree of Combined Leverage Is Equal to the Degree

question 32

Multiple Choice

The degree of combined leverage is equal to the degree of operating leverage ____ the degree of financial leverage.

• A) added to
• B) divided by
• C) multiplied by
• D) subtracted from

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Definitions:

Correlation

A statistical measure that indicates the extent to which two or more variables fluctuate together.

Standards

Established criteria or benchmarks against which performance, quality, and compliance are measured.

Direct Labor Variance

The difference between the budgeted cost of direct labor and the actual cost incurred, used to assess labor efficiency and cost control in production.

Per-unit Standards

Defined benchmarks for the amount of materials, labor, and overhead costs that should be used in producing a single unit of a product.