Which one of the following combination of statements is true? Group of answer choices Operating leverage...

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Which one of the following combination of statements is true? Group of answer choices Operating leverage relates to the use of fixed costs and financial leverage relates to the use of debt. And, the two leverages are positively correlated. Operating leverage relates to the use of debt and financial leverage relates to the use of fixed costs. And, the two leverages are negatively correlated. Operating leverage relates to the use of fixed costs and financial leverage relates to the use of debt. And, the two leverages are negatively correlated. Operating leverage relates to the use of debt and financial leverage relates to the use of fixed costs. And, the two leverages are positively correlated. A firm prepares its finished goods inventory two ways - using variable costing and using absorption costing. Which method is acceptable for external reporting purposes? Group of answer choices Variable Costing Neither is acceptable for external reporting Absorption Costing A company's contribution format income statement for the most recent month is given below: Sales (13,500 units at $20 per unit) $270,000 Variable Costs $135.000 Salo 64bo00 Contribution Margin $135,000 (405000) Cots Z430000 Cresi magi Fixed Costs $90.000 (Rojoo) SOA $45,000 A NI lo3o00 Net Operating Income The president is convinced that a 20% reduction in price, along with a $50,000 advertising surge, will cause unit sales to triple. Prepare a new contribution format income statement that reflects this proposal. (4 points) Create a table like above to format your answer. Explain (using specific numbers) the exact cause of the difference in the net operating income compared to the original scenario. Do not refer to simple 1 differences in the line-item values from the two contribution format income Adu statements. (4 points) Create a table (if needed) to organize this answer. Which one of the following combination of statements is true? Group of answer choices Operating leverage relates to the use of fixed costs and financial leverage relates to the use of debt. And, the two leverages are positively correlated. Operating leverage relates to the use of debt and financial leverage relates to the use of fixed costs. And, the two leverages are negatively correlated. Operating leverage relates to the use of fixed costs and financial leverage relates to the use of debt. And, the two leverages are negatively correlated. Operating leverage relates to the use of debt and financial leverage relates to the use of fixed costs. And, the two leverages are positively correlated. A firm prepares its finished goods inventory two ways - using variable costing and using absorption costing. Which method is acceptable for external reporting purposes? Group of answer choices Variable Costing Neither is acceptable for external reporting Absorption Costing A company's contribution format income statement for the most recent month is given below: Sales (13,500 units at $20 per unit) $270,000 Variable Costs $135.000 Salo 64bo00 Contribution Margin $135,000 (405000) Cots Z430000 Cresi magi Fixed Costs $90.000 (Rojoo) SOA $45,000 A NI lo3o00 Net Operating Income The president is convinced that a 20% reduction in price, along with a $50,000 advertising surge, will cause unit sales to triple. Prepare a new contribution format income statement that reflects this proposal. (4 points) Create a table like above to format your answer. Explain (using specific numbers) the exact cause of the difference in the net operating income compared to the original scenario. Do not refer to simple 1 differences in the line-item values from the two contribution format income Adu statements. (4 points) Create a table (if needed) to organize this answer.

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Operating leverage is the firms ability to use fixed operating costs in order to magnify the effects of changes in sales on its operating income Finan... View the full answer