The Degree of Operating Leverage (DOL) Can Be Measured by the Percent

question 150

Multiple Choice

The degree of operating leverage (DOL) can be measured by the percent change in operating income (EBIT) divided by percent change in:

• A) fixed costs
• B) variable costs
• C) unit sales
• D) total costs

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Definitions:

Approaches

Methods or strategies employed in dealing with a problem or task.

Technology-enabled Products

Goods or services enhanced with technological features or capabilities, offering additional value or functionality.

Consumer Demand

The desire for particular goods or services that consumers are willing and able to purchase at a given price.

Skimming

A pricing strategy in which a high price is set for a new product to “skim” off customers willing to pay a premium before lowering the price to attract a broader market.