Discuss what does a businesss contribution margin represent


Discussion Post: Operating Leverage

Companies often use leverage to augment profits, please explain the following in detail:

o With regards to Operating Leverage, please explain why a company with HIGH Operating Leverage faces greater financial risk in a declining sales period compared to a company with LOW Operating Leverage. (HINT: The key here is the relation between fixed costs and variable costs.)

o What does a business's Contribution Margin represent? What does the Contribution Margin have to do with Operating Leverage?

The response should include a reference list. Double-space, using Times New Roman 12 pnt font, one-inch margins, and APA style of writing and citations.

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Operation Management: Discuss what does a businesss contribution margin represent
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