Companies with high operating leverages generally have higher fixed costs than variable costs.

Question

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High operating leverage means that a company has a high proportion of fixed costs in its cost structure. This means that changes in sales revenue will have a greater impact on the company's profits due to the high fixed costs that must be paid regardless of how many products or services are sold. Therefore, high operating leverage is associated with higher fixed costs than variable costs.

Companies with High Operating Leverages Generally Have Higher Fixed Costs