The extent to which an organization uses ﬁxed costs in its cost structure is measured by:

Question

Quizplus · Accepted Answer

The measurement of the extent to which an organization uses fixed costs in its cost structure is referred to as operating leverage. It measures the impact of changes in sales volume on a company's operating income. Higher fixed costs relative to variable costs result in higher operating leverage, and vice versa. Therefore, the correct answer is B, operating leverage.

The Extent to Which an Organization Uses ﬁXed Costs in Its