Business Risk Is a Function of

question 39

Multiple Choice

Business risk is a function of

• A) Sales variability.
• B) Operating leverage.
• C) Financial leverage.
• D) a and b.
• E) b and c.

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Definitions:

Direct Labor

The work of factory employees that can be directly associated with converting raw materials into finished goods.

Product Cost

The total cost associated with producing or manufacturing a product, including materials, labor, and overhead.

Factory Overhead

All costs related to manufacturing that are not direct materials or direct labor expenses.

Cost Allocation

The process by which factory overhead or other costs are assigned to a cost object, such as a job.