If a Company Sells 20,000 Units at $20 Each, Has

question 148

Multiple Choice

If a company sells 20,000 units at $20 each, has fixed costs of $50,000 and a variable cost of $10 per unit, what is their degree of operating leverage (DOL) ?

• A)1.6
• B)2.5
• C)1.33
• D)1.7

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Definitions:

Electrical Control Circuit

A circuit designed to control the operation of electrical devices through the use of relays, switches, and other control components.

Differential Control

A control method that utilizes the difference between two or more variables to regulate some aspect of machine operation, often used for precise control in industrial settings.

Two Position

A term referring to devices or controls that have two distinct settings or positions, such as on/off switches or binary valves.

Measured Medium

The specific substance or entity whose properties or characteristics are being quantified or monitored.