Operating Leverage Is

question 117

Multiple Choice

Operating leverage is

• A) the difference between sales and variable expense.
• B) the use of fixed costs to extract higher percentage changes in profits as sales activity changes.
• C) the portion of each sales dollar available to cover fixed costs and provide for profit.
• D) visually portrays the relationship between profits and units sold.
• E) none of these

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Definitions:

Population Standard Deviation

A measure of the dispersion or spread of a set of data values in a population, indicating how much individuals within this population vary from the population mean.

Interval Estimate

An estimate of a population parameter that provides a range of values believed to contain the parameter with a certain degree of confidence.

Sample Standard Deviation

A measure of the dispersion or variability of a set of data points in a sample.

Point Estimate

A single value estimation derived from a sample that serves as the best guess of a population parameter.