As fixed operating costs increase and all other factors are held constant, ________.   the degree of operating leverage will decrease   the degree of total leverage will increase   the degree of total leverage will decrease   the degree of operating leverage will increase

Q: Operating leverage predicts the effects of a given fixed cost on operating income when: Group of…

A: The objective of the question is to understand when operating leverage can predict the effects of a…

Q: CVP analysis relies on the assumptions that costs are either strictly fixed or strictly variable.…

A: Introduction:- Cost-volume-profit analysis is used to measures how changes in variable and fixed…

Q: The concept of operating leverage involves the use of __________ to magnify returns at high levels…

A: Introduction: Usually, an operating leverage is a measure of the extent to which a mixture of the…

Q: 14 Within the relevant range of activity, how will variable cost per unit behave? Select one: a.…

A: The correct answer is d. It will remain constant.Explanation:Variable Costs are costs that change in…

Q: Variable costs within the relevant range for a firm are assumed: A. Not to vary per unit.…

A: Variable costs within the relevant range remains constant per unit but changes in total with the…

Q: Which of the following statements accurately describes the "relevant range?" a. The operation…

A: The relevant range is production range in which fixed costs remain constant. Fixed cost is a cost…

Q: Suppose that the elasticity of demand at a given price level is E(p)=.8. What does that mean? Select…

A: Answer -The company should lower the prices to raise revenues. Since 0<E(p)<1, demand is…

Q: Which of the following statements about operating leverage is false? O a. If the degree of operating…

A: Answer

Q: Fixed costs per unit increase proportionately with increases in volume of activity within the…

A:

Q: Which of the following describes the behavior of the fixed cost per unit?

A: Fixed cost is the cost which is doesnt change gets effects with the change in production which means…

Q: What is characteristic of variable costs within the relevant range?   A. Decrease in total as as…

A: Variable costs within the relevant range has following characteristics :- Total variable cost…

Q: Would an increase in variable costs per unit cause a company’s break-even point to increase or…

A: Variable cost is an amount that changes in total in proportion to the volume produced and sold…

Q: All other things the same, which of the following would be true of the contribution margin and…

A: The contribution margin is the part of sales revenue that remained after deducting the variable cost…

Q: when the contribution margin ratio increases

A: Option A is wrong because break-even point decreases when the contribution margin ratio increases.…

Q: When activity volume decreases in the short term, which of the following is true? (hint: some costs…

A: VC per unit remains constant as the total VC changes with direct proportion to the volume of output.…

Q: Explain why an increase in variable costs per unit could cause a company’s break-even point to…

A: The Breakeven point is that level of sales at which Contribution is equal to Fixed cost. In orher…

Q: Within the relevant range: a.        both total variable costs and total fixed costs will remain…

A: The costs incurred into the production are classified as fixed and variable costs. The variable…

Q: When the volume of production is higher than the volume of production at break-even point, than the…

A: Answer - Correct Option is Option C) current amount of profit

Q: If fixed costs are a __________ percentage of __________, operating leverage is __________.   A.…

A: Solution:- Operating leverage means the use of fixed operating cost in the business.

Q: Would an increase in variable costs per unit cause a company’s break-even point to increase or…

A: The Breakeven point is that level of sales at which Contribution is equal to Fixed cost. In orher…

Q: )high total costs per unit. high fixed costs in its production process. ) high variable costs in its…

A: Operating leverage is the results from existence of fixed costs that the firm must pay to operate.

Q: For an enterprise, when at least one input is held constant while other inputs are increased, there…

A: The question is based on concept to establish relationship between input and change in input with…

Q: A high operating margin implies that ______________ . The company is in a better position to…

A: Operating margin means proportion of operating income over sales

Q: The profit maximizing condition for a purely competitive firm is when. Price elasticity of demand is…

A: The correct answer for the above mentioned question is given in the following steps for your…

Q: The use of fixed costs to extract higher percentage changes in profits as sales activity changes…

A: SOLUTION- DEGREE OF OPERATING LEVERAGE CALCULATES THE PROPORTIONAL CHANGE IN OPERATING INCOME THAT…

Q: Degree of operating leverage (DOL) measures the sensitivity of OCF in response to changes of The…

A: We have formula,Degree of operating leverage(DOL) = % change in operating income/% change in sales

Q: As the variable cost increases but the selling price remains constant, the A. Degree of operating…

A: Break-even analysis is a technique used widely by the production management. It helps to determine…