The Degree of Operating Leverage Is Computed as

question 77

Multiple Choice

The degree of operating leverage is computed as

• A) percent change in operating profit divided by percent change in net income.
• B) percent change in unit volume divided by percent change in operating profit.
• C) percent change in EPS divided by percent change in operating income.
• D) percent change in operating income divided by percent change in unit volume.

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Definitions:

External Cost

Costs that are not borne by the producer or consumer, but by a third party or the environment, such as pollution.

Air Conditioning

A system for controlling the humidity, ventilation, and temperature in a building or vehicle to provide a comfortable indoor environment.

Public Good

A public good refers to a product or service offered to every member of a society for free, regardless of profit, by either governmental entities or private individuals or groups.

Police Protection

A mechanism of public security provided by governmental police forces aiming to maintain order, enforce the law, and prevent and investigate crime.