Which of the Following Statements Is TRUE Concerning Operating Leverage

question 88

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.

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