The lower the DOL, the greater the change in operating income will be as a result of a slight change in sales.

Name: The lower the DOL, the greater the change in operating income will be as a result of a slight change in sales.
Brand: Quizplus
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Question

Quizplus · Accepted Answer

The higher the Degree of Operating Leverage (DOL), the greater the change in operating income will be as a result of a slight change in sales, because DOL measures the sensitivity of operating income to changes in sales volume.

The Lower the DOL, the Greater the Change in Operating