________ is the ratio of fixed costs to variable costs.
A)Contribution margin
B)Break-even point
C)Operating leverage
D)The margin of safety

Question

Quizplus · Accepted Answer

Operating leverage is the ratio of fixed costs to variable costs. It measures the degree to which a firm's profits are affected by changes in sales volume. A higher operating leverage indicates that a firm's profits are more sensitive to changes in sales volume, which can be either positive or negative depending on the circumstances.

________ Is the Ratio of Fixed Costs to Variable Costs