The use of fixed costs to extract higher percentage changes in profits as sales activity changes involves a. margin of safety. b. unit contribution margin. 7-6 c. degree of operating leverage. d. sensitivity analysis. e. variable cost reduction.

The use of fixed costs to extract higher percentage changes in profits as sales activity changes involves a. margin of safety. b. unit contribution margin. 7-6 c. degree of operating leverage. d. sensitivity analysis. e. variable cost reduction.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Question

e. All of these.
The use of fixed costs to extract higher percentage changes in profits as sales activity
changes involves
a. margin of safety.
b. unit contribution margin.
c. degree of operating leverage.
d. sensitivity analysis.
e. variable cost reduction.
7-6

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