SXF Sells Its Single Product for $14 Per Unit, and Its

question 40

Multiple Choice

SXF sells its single product for $14 per unit, and its variable cost per unit is $4. Total fixed costs are $800. Its CVP graph is as follows: If SXF increases its volume of sales by 10%, what will happen to its degree of operating leverage?

• A)It will decrease
• B)It will increase
• C)It will stay the same
• D)Cannot be determined

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Definitions:

Digital Channel

A medium of communication that is facilitated by electronic technology, such as social media, email, or websites.

Medium

A means or channel through which content is delivered or communicated, such as print, digital, or broadcast.

Channel

A medium through which a message is transmitted from sender to receiver, such as email, telephone, or face-to-face communication.

Written, Printed Communication

The exchange of information or messages through texts that are inscribed on a physical medium like paper.