If a Company Sells 10,000 Units at $25 Each, Has

question 115

Multiple Choice

If a company sells 10,000 units at $25 each, has fixed costs of $20,000, and a variable cost of $20 per unit, what is its degree of operating leverage (DOL) ?

• A)1.67
• B)2.5
• C)2.0
• D)1.6

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Definitions:

Communication

The process of sending and receiving symbols with meanings attached.

Effective Communication

The process of exchanging information clearly and accurately in a way that is understood and accepted by all parties involved.

Minimal Time

The least amount of time required to complete a task or reach an objective efficiently.

Information Filtering

The intentional distortion of information to make it appear more favorable to the recipient.