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Figure 27-2
-Identify the structure labeled "4."
Operating Leverage
refers to the extent to which a firm utilizes fixed costs in its cost structure, influencing how changes in sales volume affect operating income.
Net Operating Income
This is a company's income after all operating expenses, excluding financial expenses and taxes, have been deducted from total revenue.
Operating Leverage
The degree to which a company's net income can be affected by a change in sales, influenced by the proportion of fixed costs in a company's cost structure.
Salesvolume
The total amount of a product sold within a specific period.
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