Operating Leverage Is the Relative Mix of

question 100

Multiple Choice

Operating leverage is the relative mix of

• A) revenues earned and manufacturing costs.
• B) fixed and variable costs.
• C) high-volume and low-volume products.
• D) manufacturing costs and period costs.
• E) revenues earned and variable costs.

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Definitions:

Cost-Plus Pricing

A pricing strategy where the selling price is determined by adding a specific markup to a product's cost price.

Cost Behaviour

The way in which a cost reacts or changes when there is a change in the level of business activity.

Marginal Revenue

The additional income earned from selling one more unit of a good or service.

Marginal Cost

The increase in total cost that arises from producing one additional unit of a product or service.