Operating Leverage Predicts the Effects Fixed Costs Have on Changes

question 216

Multiple Choice

Operating leverage predicts the effects 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:

Process Cost Accounting

An accounting method used to track and allocate costs of production by process or department for continuous manufacturing environments.

Distinctive Features

Unique characteristics or attributes that set an entity, object, or concept apart from others.

Unit Production Costs

The total expenses involved in manufacturing one unit of a product, covering materials, labor, and overhead costs.

Units Of Production

A depreciation method that allocates the cost of an asset over its useful life based on the amount of production or use during the period.