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

Understand the concept of opportunity costs and how it influences financial decision-making.

Apply cost-volume-profit analysis to determine break-even points and target profit scenarios.

Identify and calculate relevant costs for investment decisions and understand sunk costs.

Analyze how changing billing policies affects operational costs and consumer behavior.

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Definitions:

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