Asked by Huyen Nguyen on May 20, 2024
Verified
The extent to which an organisation uses fixed costs in its cost structure is called
A) financial leverage.
B) operating leverage.
C) fixed cost leverage.
D) operating leverage AND fixed cost leverage.
Operating Leverage
A measure of how revenue growth translates into growth in operating income, indicating the level of fixed versus variable costs in a company's operating structure.
Cost Structure
The composition of a company's costs, including fixed and variable costs, that influence its pricing and profitability.
Fixed Costs
Expenses that remain constant regardless of the level of production or business activity.
- Analyze the makeup of cost structures to discern the implications of adjustments in fixed and variable charges on income and break-even markers.
Verified Answer
Learning Objectives
- Analyze the makeup of cost structures to discern the implications of adjustments in fixed and variable charges on income and break-even markers.
Related questions
A Firm Is Reorganising and Reclassifying Its Cost Structure ...
Fixed Costs Per Unit Remain Constant Over a Given Range ...
Fixed Costs Are Equal to Zero When Production Is Zero
If the Property Tax Rates Are Increased, This Change in ...
If Direct Materials Cost Per Unit Increases, the Break-Even Point ...