The use of high technology equipment to manufacture products instead of highly skilled labor usually results in ________.
A) higher discretionary fixed costs
B) higher discretionary variable costs
C) lower risk
D) higher operating leverage

Question

Quizplus · Accepted Answer

The use of high technology equipment typically increases a company's fixed costs (due to the investment in equipment) and decreases its variable costs (due to less reliance on labor). This shift results in higher operating leverage, meaning that a company could see larger changes in operating income for a given change in sales revenue.

The Use of High Technology Equipment to Manufacture Products Instead