Question: Define the term high operating leverage and explain why, in time of increasing sales revenue, it is more profitable to have high rather than low

Define the term high operating leverage and explain why, in time of increasing sales revenue, it is more profitable to have high rather than low operating leverage.

Hint: Use numbers and figures to illustrate your point!

Step by Step Solution

★★★★★

3.54 Rating (157 Votes )

There are 3 Steps involved in it

1 Expert Approved Answer

Step: 1 Unlock

Leverage the term leverage is used to describe ability of the firm to use fixed cost asset or funds ... View full answer

Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock

Step: 3 Unlock

Students Have Also Explored These Related Accounting Questions!

Using the following information, determine which customer is more profitable to serve. Calculate both total profit and profit percentage (of revenue) for each customer. Line Item Customer A Customer...

Define the term operating leverage and explain how it affects profits.

Define the term high operating leverage and explain why, in time of increasing sales revenue, it is more profitable to have high rather than low operating leverage. Use numbers and figures to...

Define the term high operating leverage and explain why, in times of increasing sales revenue, it is more profitable to have high rather than low operating leverage. LO1

At its Sutter City plant, Yuba Machine Company manufactures nut shellers, which it sells to nut processors throughout the world. Since its inception, the family-owned business has used actual factory...

Define the term corporate social responsibility and explain why a company has a responsibility to society.

Define the term net realizable value, and explain how this concept can be used to allocate joint costs.

Define the term "capacity to consume" and explain how it is part of marketing to the bottom-of-the-pyramid.

MAS06-Business and Company Law - T2 2020 - Final Assessment Paper - Saved rajpschhetri Sensitivity Draw Design Layout References Mailings Review View Help EndNote Grammarly Table Design Layout -11 -...

Veach Division has total assets (net of accumulated depreciation) of $462,000 at the beginning of year 1. One of the assets is a machine that has a net book value of $43,260. Expected divisional...

Fixation biases arise from preconceived ideas formed about a person, group of people, or situation. Question: What four examples indicate a fixation bias? Instruction: Choose all options that best...

Payable Transactions Richmond Company engaged in the following transactions: a. Purchased $16,000 of supplies from ABC Supplies on February 16. Amount due in full on March 31. b. Paid for 25% of the...

The charter for KWVN TV, Inc. authorizes the company to issue 100,000 shares of $3, no-par preferred stock and 500,000 shares of common stock with $1 par value. During its start-up phase, KWVN -TV...

A firm CEO assumes that managers are agents who are likely to engage in self-serving opportunistic activities if left to their own devices. Which debate supports this perspective? a....

CALCULATOR HESSAGE MY TNSTRUCTOR PULL SCREEN PRINTER Vr Exercise 4-17 Action Quest Games Inc. adjusts its accounts annually. The following information is available for the year ended December 31,...

Comptech Ltd is a manufacturer of optical equipment. In September 2019, Ed Thompson the Chief Research Officer, attended a conference in Switzerland that focused on optical developments for the 21st...

List the steps needed to develop an activity-based cost.

You decide to take the analysis a bit further. Using the results you obtained in Problem 3 and the lessons you have learned about percentage change, do the following: REQUIRED : a. Calculate the...

What is a product or service value proposition? How does it affect customer purchase decisions?

=+b. Suppose you are told the selected review was submitted in Word format. What is the probability that the review was medium in length?

=+b. What is the probability that at least 1 of 25 points on a control chart signals a problem with a manufacturing process when in fact the process is running correctly?

=+a 5% detection rate for noncarriers. Suppose that the diagnostic test is applied independently to two different samples from the same randomly selected individual.