One way to compute the expected change in operating income due to a change in sales volume at a given level of sales is to

Question

Quizplus · Accepted Answer

The degree of operating leverage (DOL) measures the change in operating income resulting from a change in sales volume, given a certain level of fixed costs. By calculating the DOL at a specific level of sales, we can then determine the expected change in operating income due to a change in sales volume at that level. Therefore, option A is the best choice. The other options listed are not direct methods for calculating the expected change in operating income due to a change in sales volume.

One Way to Compute the Expected Change in Operating Income