If the Degree of Operating Leverage Is 4, Then a One

question 176

Multiple Choice

If the degree of operating leverage is 4, then a one percent change in quantity sold should result in a four percent change in:

• A) unit contribution margin.
• B) revenue.
• C) variable expense.
• D) net operating income.

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Definitions:

Cost Of Production Report

A document detailing the total cost incurred to produce goods or services, often used in manufacturing to track expenses.

Transferred-In Costs

Costs associated with goods that are moved from one production process to another within a manufacturing environment.

Transferred-In Costs

Costs accumulated during a process that are moved to a subsequent process or stage in production.

Process Costing

A costing method used for homogeneous products, where costs are assigned to units of output based on the process or stages they go through in the production cycle.