Two Technicians Are Discussing Computerized Service Information

question 18

Multiple Choice

Two technicians are discussing computerized service information. Technician A says that paper manuals are much less expensive to maintain. Technician B says that most paper service manuals have been replaced by computerized data systems. Who is correct?

• A) A only
• B) B only
• C) Both A and B
• D) Neither A nor B

---

Definitions:

Variable Expenses

Expenses that vary directly with the amount of activity or production volume.

Fixed Expenses

Expenses that do not change with the level of production or sales, remaining constant regardless of business activity levels.

Degree Of Operating Leverage

A ratio that measures a company's fixed costs as a proportion of its total costs, indicating how a change in sales will affect its operating income.

Contribution Format

A type of income statement where costs are separated into variable and fixed categories, highlighting the contribution margin.