Which of the Following Statements Is True of Operating Leverage

question 117

Multiple Choice

Which of the following statements is true of operating leverage?

• A) It is the difference between price and unit variable cost.
• B) It is the use of fixed costs to increase the percentage changes in profits as sales activity changes.
• C) It shows how far a company's actual sales and/or units are above or below the break-even point.
• D) It is the ratio of total contribution margin to sales or of unit contribution to price.
• E) None of these

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