The organisation more likely to be highly operationally geared is:

Question

Quizplus · Accepted Answer

The level of operational gearing depends on the ratio of fixed costs to variable costs. In industries where fixed costs are high (such as vehicle manufacturing), any increase in sales will lead to a disproportionately large increase in profits due to the high operating leverage. On the other hand, industries where fixed costs are low (such as a hairdresser), changes in sales volume have a smaller effect on profits. Therefore, the vehicle manufacturer is more likely to be highly operationally geared.

The Organisation More Likely to Be Highly Operationally Geared Is