One Way to Compute the Expected Change in Operating Income

question 28

Multiple Choice

One way to compute the expected change in operating income due to a change in sales volume at a given level of sales is to compute

• A)Degree of operating leverage.
• B)High-low analysis.
• C)Scattergraph analysis.
• D)Horizontal analysis.

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Definitions:

Mass Customization

A manufacturing technique that combines the flexibility and personalization of custom-made products with the low unit costs associated with mass production.

Product-Focused Process

A method of production that centers around creating a single product or a small range of products, allowing for efficiencies in specialization and equipment use.

High-Volume

Refers to operations or production processes that generate a large quantity of output within a given time frame.

High-Variety

Refers to the broad range of product types and options available to consumers, typically seen in manufacturing and service industries.