What Is Characteristic of Operating Leverage

question 56

Multiple Choice

What is characteristic of operating leverage?

• A) It provides the same information as margin of safety.
• B) It is concerned with the relative mix of contribution margin and margin of safety.
• C) It is likely to be lower in an automated manufacturing system than in a manual system.
• D) It uses fixed costs to extract higher percentage changes in profits as sales activity changes.

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Definitions:

Experimental Testing

Experimental testing involves conducting controlled tests to explore hypotheses and verify theories within scientific research.

Psychoanalysis

A therapeutic approach founded by Sigmund Freud that explores unconscious motives and conflicts as they influence personality and behavior.

Systematic Fashion

Refers to doing things in a methodical, organized way, typically to achieve efficiency and to ensure that no steps are missed.

Sample Size

The number of individuals or observations included in a study, which can affect the reliability and validity of the research findings.