The Degree of Operating Leverage Shows the Relationship Between Sales

question 52

True/False

The degree of operating leverage shows the relationship between sales and pretax profits.

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Definitions:

Accounting Information System

A system consisting of people, processes, and technology that manages financial data and supports business decisions.

Cost Effectiveness

An evaluation measure to determine how effectively a party is achieving its objectives relative to the costs incurred.

Human Involvement

Human involvement indicates the participation or role of individuals in a process or system, often highlighting the importance of human input and decision-making.

Special Journal

A type of accounting journal that is used for recording and categorizing a specific type of transaction which occurs frequently.