Smith Company has a degree of operating leverage of 5,while Johnson Company has a degree of operating leverage of 2.Supplied with this knowledge,pick the response below that is most typical of Johnson Company.
A)high fixed costs
B)conservative
C)large commitment to plant facilities
D)greater sales.

Question

Quizplus · Accepted Answer

A lower degree of operating leverage, like Johnson Company's, typically indicates a more conservative approach with lower fixed costs and less risk.

Smith Company Has a Degree of Operating Leverage of 5,while