Operating Leverage Predicts the Effects That Fixed Costs Have on Changes

question 131

Multiple Choice

Operating leverage predicts the effects that fixed costs have on changes in operating income when ________.

• A)production is discontinued
• B)there are no sales returns
• C)variable costs change
• D)sales volume changes

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Definitions:

Growing Demand

An increase in the quantity of a product or service that consumers are willing and able to buy over a given period.

Economizing Problem

The fundamental economic issue of meeting people's unlimited wants with limited resources, necessitating choices and priorities in resource allocation.

Economic Wants

The desires of individuals or societies for goods and services that provide utility and satisfaction, exceeding the basic needs for survival.

Economic Means

The methods or tools employed to allocate and utilize resources efficiently in the production, distribution, and consumption of goods and services.