Operating leverage predicts the effects that fixed costs have on changes in operating income when ________.

Question

Quizplus · Accepted Answer

Operating leverage is the proportion of fixed costs to variable costs, and it predicts the effects that fixed costs have on changes in operating income when sales volume changes. Therefore, option D is the correct answer. Options A, B, and C are incorrect as they do not relate to the concept of operating leverage.

Operating Leverage Predicts the Effects That Fixed Costs Have on Changes