The degree of operating leverage is equal to the ratio of the firm's total fixed cost to total variable cost.

Name: The degree of operating leverage is equal to the ratio of the firm's total fixed cost to total variable cost.
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Question

Quizplus · Accepted Answer

The degree of operating leverage is calculated as the percentage change in operating income (or EBIT) divided by the percentage change in sales, not the ratio of total fixed cost to total variable cost.

The Degree of Operating Leverage Is Equal to the Ratio