The higher the magnitude of a company's operating leverage,the more benefit the company will receive from a given percentage increase in revenue.

Question

Quizplus · Accepted Answer

This is because the higher the operating leverage, the lower the fixed costs and the higher the variable costs in the company's cost structure. As a result, a small increase in revenue leads to a larger increase in operating income, which benefits the company.

The Higher the Magnitude of a Company's Operating Leverage,the More