Both Operating Leverage and Financial Leverage Involve the Substitution of Fixed

question 6

True/False

Both operating leverage and financial leverage involve the substitution of fixed costs for variable costs.

Understand the basic concepts and significance of motivation in the workplace.

Identify and explain Maslow's hierarchy of needs and its implications for management.

Describe the ERG theory and its components.

Recognize the principles of the frustration-regression principle in motivation theories.

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Definitions:

Cost Driver

A factor that causes a change in the cost of an activity or a product, such as production volume or labor hours.

Activity-based Costing

A methodology that assigns production costs to products based on the activities required to produce them, aiming for more accurate cost allocation.

Volume-based

A pricing or costing method that changes based on the amount of goods or services produced or sold.

Non-volume-based

Refers to costing methods that allocate costs based on factors other than the volume of production, such as time or complexity.