Executive management at Ballard Books is very optimistic about the chain's ability to achieve significant increases in sales in each of the next five years.The company will most benefit if management creates a:
A) low operating leverage cost structure.
B) medium operating leverage cost structure.
C) high operating leverage cost structure.
D) no operating leverage cost structure.

Question

Quizplus · Accepted Answer

A high operating leverage cost structure would be the best choice in this scenario because it allows the company to benefit greatly from increases in sales. This is because a high operating leverage cost structure means that a significant portion of the company's costs are fixed, such as rent and salaries, and do not change as the company's sales increase. Therefore, any additional revenue generated from increased sales goes directly to the company's bottom line, resulting in higher profits.

Executive Management at Ballard Books Is Very Optimistic About the Chain's