Poutine Company Is Considering Offering Long-Term Contracts to Many of Its

question 48

Multiple Choice

Poutine Company is considering offering long-term contracts to many of its non-contract employees (a switch to fixed labour costs from variable labour costs) .What is the impact of this decision?

• A) The increase in operating leverage results in greater variability in operating income.
• B) The increase in operating leverage results in less variability in operating income.
• C) The decrease in operating leverage results in greater variability in operating income.
• D) The decrease in operating leverage results in less variability in operating income.

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Definitions:

Chlorofluorocarbons

Man-made chemical compounds that were once widely used in refrigeration, aerosols, and foam blowing applications, but are known for their damaging effects on the ozone layer.

Cold War

The period of geopolitical tension between the Soviet Union and the United States and their respective allies, post-World War II, marked by proxy wars, political conflict, and ideological rivalry.

Consumption

The use of goods and services by households, or the amount of goods and services used in a particular time period, often analyzed in economic contexts.

Red Scare

Periods in U.S. history characterized by widespread fear of radical political and the perceived threat of communism, notably after World War I and during the Cold War.