Operating leverage predicts the effects fixed costs have on changes in operating income when sales volume changes.

Name: Operating leverage predicts the effects fixed costs have on changes in operating income when sales volume changes.
Brand: Quizplus
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Question

Quizplus · Accepted Answer

Operating leverage measures the impact of fixed costs on changes in operating income or profits resulting from changes in sales volume. It shows how sensitively a company's profits respond to changes in sales volume.

Operating Leverage Predicts the Effects Fixed Costs Have on Changes