Melissa Manager Expects Next Year's Degree of Operating Leverage to Increase

question 178

Multiple Choice

Melissa Manager expects next year's degree of operating leverage to increase. Which of the following statements is consistent with Melissa's expectations?

• A)Next year's activity level is budgeted to be lower than this year's
• B)Next year's total fixed costs are expected to be lower than this year's
• C)Next year's selling price is expected to increase
• D)Next year's variable costs per unit are expected to decrease

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Definitions:

Insider Trading

Insider trading involves buying or selling a publicly-traded company's stock by someone who has non-public, material information about that stock.

Tipped Information

Insider information that is passed from one person to another, which can be illegal in financial markets.

Larceny

The criminal act of taking someone else's property without permission with the intent to permanently deprive them of it.

Fifth Amendment

An amendment to the U.S. Constitution that provides several protections for people accused of crimes, including the right to avoid self-incrimination and the prohibition against double jeopardy.