The Degree of Operating Leverage Can Be Measured by ________

question 127

Multiple Choice

The degree of operating leverage can be measured by ________.

• A) dividing the contribution margin by operating income
• B) dividing the fixed costs by the sales price per unit
• C) multiplying the contribution margin by sales revenue
• D) dividing the fixed costs by contribution margin

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Definitions:

Personal Income

The total income received by individuals from all sources, including wages, dividends, and government benefits.

Corporate Income Taxes

Taxes imposed on the net income of corporations by the government.

Retained Earnings

The portion of net income that is retained by a corporation rather than distributed to its owners as dividends.

Household Purchases

Refers to the total spending by households on goods and services for personal use.