Operating leverage is the relative mix of
A) revenues earned and manufacturing costs.
B) fixed and variable costs.
C) high-volume and low-volume products.
D) manufacturing costs and period costs.
E) revenues earned and variable costs.

Question

Quizplus · Accepted Answer

Operating leverage refers to the degree of fixed costs in a company's cost structure. Therefore, it is dependent on the mix of fixed and variable costs, making option B the best choice. The other options do not accurately reflect the concept of operating leverage.

Operating Leverage Is the Relative Mix of