Operating Leverage is the process of adding fixed costs to reduce variable costs. An example is...

 

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Operating Leverage is the process of adding fixed costs to reduce variable costs. An example is a company that manufactures its own product would have higher fixed costs and a higher break even but should have also have a higher contribution margin per unit. A company that outsources manufacturing would have lower fixed costs and a lower break even but also a lower contribution margin. Find an example of a recent news story where a company has a made a decision that will increase or decrease operating leverage. Explain how their decision increased or decreased operating leverage. Operating Leverage is the process of adding fixed costs to reduce variable costs. An example is a company that manufactures its own product would have higher fixed costs and a higher break even but should have also have a higher contribution margin per unit. A company that outsources manufacturing would have lower fixed costs and a lower break even but also a lower contribution margin. Find an example of a recent news story where a company has a made a decision that will increase or decrease operating leverage. Explain how their decision increased or decreased operating leverage.

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One recent example of a company making a decision that will increase operating leverage is Teslas pl... View the full answer