Which one of the following is defined, at any given sales volume, as the ratio of the total contribution margin to operating profit at that sales volume?

Question

Quizplus · Accepted Answer

The degree of operating leverage (DOL) is defined as the ratio of the total contribution margin to operating profit at any given sales volume. The contribution margin ratio (A) is the ratio of contribution margin to total sales revenue. Margin of safety ratio (B) is the ratio of actual or budgeted sales over the breakeven sales. Breakeven point (D) is the point at which total revenue equals total costs, resulting in zero profit or loss. Margin of safety (E) is the difference between actual or budgeted sales and the breakeven sales.

Which One of the Following Is Defined, at Any Given