Multiple Choice Questions: 1) Operating leverage predicts the effects fixed costs have on changes in operating income
Question:
Multiple Choice Questions:
1) Operating leverage predicts the effects fixed costs have on changes in operating income when:
A) Production is discontinued.
B) There are no sales returns.
C) Variable costs change.
D) Sales volume changes.
2) The degree of operating leverage can be measured by:
A) Dividing the contribution margin by operating income.
B) Dividing the fixed costs by the sales price per unit.
C) Multiplying the contribution margin to sales revenue.
D) Dividing the fixed costs by contribution margin.
3) A company's proportion of fixed costs to variable costs is called its:
A) Target profit.
B) Relevant range.
C) Mixed cost.
D) Cost structure.
Accounting Business Reporting for Decision Making
ISBN: 9780730302414
4th edition
Authors: Jacqueline Birt, Keryn Chalmers, Albie Brooks, Suzanne Byrne, Judy Oliver