Miller Manufacturing's Degree of Operating Leverage Is 1

question 57

Multiple Choice

Miller Manufacturing's degree of operating leverage is 1.5. Warren Corporation's degree of operating leverage is 3. Warren's earnings would go up (or down) by ________ as much as Miller's with an equal increase (or decrease) in sales.

• A) 1/2
• B) 1.5 times
• C) 2 times
• D) 4.5 times

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Definitions:

Semantic Networks

Cognitive structures that use nodes representing concepts or instances linked together by relationships illustrating how these concepts or instances are related.

Executive Control System

A component of the brain responsible for regulating attention, making plans, and consciously controlling thoughts and actions.

Schemas

Cognitive structures that help individuals organize and interpret information, based on accumulated knowledge and experiences.

Clustering Principle

A concept in psychology that suggests individuals tend to remember similar or related items in groups.