The Degree of Operating Leverage Has Which of the Following

question 8

Multiple Choice

The degree of operating leverage has which of the following characteristics?

• A) The closer the firm is operating to breakeven quantity,the smaller the DOL.
• B) A change in quantity demanded will produce the same percentage change in EBIT as an identical change in price per unit of output,other things held constant.
• C) The DOL is not a fixed number for a given firm,but will depend upon the time zero values of the economic variables Q (Quantity),P (Price),and V (Volume).
• D) The DOL relates the change in net income to the change in net operating income.
• E) If the firm has no debt,the DOL will equal 1.

Understand the purpose and impact of flexible manufacturing systems and design for disassembly.

Differentiate between various trends in manufacturing technology (e.g., remanufacturing, cellular layouts).

Recognize the significance of technology in enhancing production efficiency and innovation (lean production, mass customization).

Understand the concepts of mediating, long-linked, and intensive technology and their applications in industry.