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

question 38

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 operating income by contribution margin.

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Definitions:

Majority Rule

A decision-making process that follows the preference of more than half of the members in a group.

Public Choice Analysis

An economic theory that studies how public decisions are made, considering individuals as rational actors who pursue their self-interest.

Self-Interests

The pursuit of personal advantage and well-being, often driving economic decisions and behaviors.