To Find a Firm's Operating Leverage Factor at a Given

question 230

Multiple Choice

To find a firm's operating leverage factor at a given level of sales,you

• A)divide the contribution margin by fixed expenses.
• B)divide the contribution margin by operating income.
• C)divide variable expenses by fixed expenses.
• D)divide relatively operating income by contribution margin.

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Definitions:

Wages

Payment given to workers for their work or services, often determined by the hour, day, or per piece completed.

Direct Material

Raw materials used in the manufacturing process that are directly attributed to the finished product.

Production Cost

The total expenses incurred in the process of producing goods or services, including materials, labor, and overhead costs.

Organization's Objectives

The specific goals set by a business or organization to guide its operations and strategic direction.