All Else Being Equal, a Company with a Low Operating

question 247

Multiple Choice

All else being equal, a company with a low operating leverage will have

• A)relatively high fixed costs.
• B)relatively high contribution margin ratio.
• C)relatively high risk.
• D)relatively high variable costs.

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Definitions:

Raw Materials

The basic substances used in the production of goods, often extracted from the earth.

Custom Made

Products or services specifically tailored to meet the individual needs or preferences of a client.

Raw Materials

The fundamental substances used in the production of goods, typically natural resources or agricultural products.

Widget Producer

A generic term often used to describe a manufacturer that specializes in producing a non-specific, often hypothetical, item or product.