Operating leverage is best described as
Select one:
A. a measure of the extent to which an organization's operations are fixed.
B. a measure of the extent to which an organization's costs financed by equity.
C. a measure of the extent to which an organization's contribution margin is affected by sales mix of products.
D. a measure of the extent to which an organization's operations are financed by debt.
In a cost-volume-profit graph
Select one:
A. an increase in unit variable costs would decrease the slope of the total costs line.
B. the total revenues line crosses the horizontal axis at the break-even point.
C. an increase in the unit selling price would shift the break-even sales point to the left.
D. an increase in the unit selling price would shift the break-even sales point to the right.
Profitability analysis involves examining the relationships among all of the following except
Select one:
A. products.
B. costs.
C. profits.
D. revenues.
A firm can reduce is operating leverage by substituting
Select one:
A. debt for equity.
B. equity for debt.
C. direct labor for robotic equipment.
D. direct materials for direct labor.
A cost-volume-profit graph
Select one:
A. plots contribution margin on the X-axis and volume on the Y-axis.
B. plots contribution margin on the Y-axis and volume on the X-axis.
C. plots both revenue and total cost on the X-axis.
D. plots both revenue and total cost on the Y-axis.
Operating leverage is best described as
Select one:
A. a measure of the extent to which an organization's costs are fixed.
B. a measure of the extent to which an organization's contribution margin is sensitive to levels of debt.
C. a measure of the extent to which an organization's operations are financed by debt.
D. a measure of the extent to which an organization's profits contribute to reductions in debt.