How Is the Degree of Operating Leverage Calculated

question 31

Multiple Choice

How is the degree of operating leverage calculated?

• A) Contribution margin divided by sales.
• B) Gross margin divided by operating income.
• C) Operating income divided by sales.
• D) Contribution margin divided by operating income.

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Definitions:

Industrial Capitalist

An individual or entity that invests in industries for profit through the ownership of physical goods and capital goods used in production.

19th Century

The period from January 1, 1801, to December 31, 1900, characterized by industrialization, colonial expansion, significant technological advancements, and various social changes.

19th Century

A period from January 1, 1801, to December 31, 1900, that was marked by significant industrial, cultural, and political change worldwide.

Cash Crops

Crops grown for direct sale in the market, as opposed to being grown for the farmer's use or for livestock feed.