Which of the following is the most precise definition of the operating leverage factor? The operating leverage factor measures
A) the proportion of fixed costs in a firm's cost structure.
B) the proportion of variable costs in a firm's cost structure.
C) the effect that an increase (decrease) in sales volume will have on profit.
D) the proportion of fixed costs in a firm's cost structure AND the proportion of variable costs in a firm's cost structure.
Correct Answer:
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