Which of the Following Statements Is True Concerning Operating Leverage

question 87

Multiple Choice

Which of the following statements is true concerning operating leverage?

• A) It summarizes the risk-return tradeoff across alternate revenue possibilities.
• B) It measures the change in operating income when costs change proportionately with the change in the number of units sold.
• C) The degree of operating leverage increases inversely to the number of units sold.
• D) The degree of operating leverage remains constant (in the relevant range) when there is a change in the number of units sold.
• E) The degree of operating leverage equals contribution margin divided by operating income, at any specific sales level.

---

Definitions:

Specialty

A particular branch of medicine or surgery that someone concentrates on and becomes expert in.

Psychotherapy

A form of treatment for mental disorders that involves talking with a psychiatric professional to explore and overcome problematic thoughts, feelings, and behaviors.

Psychiatrists

Medical doctors specialized in the diagnosis, treatment, and prevention of mental health disorders, often employing medication as part of treatment.

1950s

The decade spanning from the year 1950 to 1959, often noted for its post-war cultural and technological advancements.