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Variable Cost
Variable costs vary directly with the level of production output and can include expenses like raw materials and labor directly involved in a product's manufacturing.
Fixed Costs
Fixed costs are those business expenses that remain constant regardless of the level of production or sales, such as rent, salaries, and insurance.
Operating Leverage
A measure of how revenue growth translates into growth in operating income, indicating the proportion of fixed to variable costs in a company's cost structure.
Break-even Point
The point at which total revenues equal total costs, resulting in neither profit nor loss.
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