If a Company Has a Degree of Operating Leverage of 3.0

question 54

Multiple Choice

If a company has a degree of operating leverage of 3.0 and sales increase by 25%, then:

• A)total variable costs will increase by 75%
• B)total variable costs will not change
• C)profit will increase by 30%
• D)profit will increase by 75%

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Definitions:

Sorority Pins

Decorative badges or pins symbolizing membership in a particular sorority, often worn as a sign of affiliation and pride.

Social Facilitation

Describes the phenomenon that an individual's performance improves when performing tasks in the presence of others as opposed to alone.

Social Loafing

The effect in which being part of a collective leads individuals to exert less towards a shared goal than when pursuing it alone.

Normative Social Influence

Being swayed by those around us to modify our actions for the purpose of receiving their admiration and inclusion.