Which of the Following Measures the Sensitivity of Profit Changes

question 46

Multiple Choice

Which of the following measures the sensitivity of profit changes to changes in sales volume?

• A)contribution margin ratio
• B)variable cost ratio
• C)operating leverage
• D)degree of operating leverage

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Definitions:

Interactive System

A computer system designed for human interaction, allowing users to directly manipulate graphics, text, or other data on a screen.

Stakeholders

Individuals or groups that have an interest, stake, or investment in a business or project and can affect or be affected by its operations.

Shareholders

Individuals or entities that own shares in a corporation, thereby having an interest in its performance and potential entitlement to dividends.

Employees

Individuals who are hired to perform specific duties in exchange for compensation under the direction and control of an employer.