Operating Leverage Is Highest in Companies That Have ________

question 56

Multiple Choice

Operating leverage is highest in companies that have ________.

• A) a service rather than a manufacturing emphasis
• B) virtually no fixed costs
• C) equal variable and fixed costs
• D) a high proportion of variable costs relative to their fixed costs
• E) a high proportion of fixed costs relative to their variable costs

---

Definitions:

Restricted Communication Network

A communication network where information flow is limited by certain rules, protocols, or structures, often for security or efficiency reasons.

Team Cohesion

The degree to which team members are united, working collaboratively towards common goals, and demonstrating strong interpersonal bonds.

Direct Physical Contact

Personal interaction that involves touch or face-to-face communication, often considered more impactful or genuine than virtual communication.

Norms

Shared beliefs or guidelines within a group or culture about how members should behave in certain situations.