Degree of operating leverage related problem


Firm A employs a high degree of operating leverage; Firm B takes a more conservative approach. Which of the following comparative statements about firms A and B is true?

a. A has a lower break-even point than B, but A's profit grows faster after the break-even.

b. A has a higher break-even point than B, but A's profit grows slower after the break-even.

c. B has a lower break-even point than A, but A's profit grows faster after break-even.

d. B has a lower break-even point than A, and profit grows the same rate for both companies after the breakeven point.

Request for Solution File

Ask an Expert for Answer!!
Accounting Basics: Degree of operating leverage related problem
Reference No:- TGS094290

Expected delivery within 24 Hours