When a fiXed Cost Is Replaced with a Variable Cost

question 208

Multiple Choice

When a fixed cost is replaced with a variable cost, the firm's ____________ effectively decreases.

• A) Operating leverage.
• B) Forecasting risk.
• C) Projected cash flow.
• D) Sensitivity contribution.
• E) Total variable cost.

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Definitions:

Internal Operational Messages

Communications within an organization that relate to its routine activities and functions.

Types

Various categories or classes into which people or things are divided based on shared characteristics or qualities.

Reader-centered Language

Writing or speech that is tailored to the interests, understanding, and preferences of the intended audience.

Adjustment

A modification made to a system, process, or document to correct or improve it.