Which of the following statements is not true? Companies that have higher fixed costs relative to variable

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Which of the following statements is not true?

Companies that have higher fixed costs relative to variable costs have higher operating leverage.

When a company's sales revenue is increasing, high operating leverage is good because it means that profits will increase rapidly.

When a company's sales revenue is decreasing, high operating leverage is good because it means that profits will decrease at a slower pace than revenues decrease.

Operating leverage refers to the extent to which a company's net income reacts to a given change in sales.

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Managerial Accounting A Focus on Ethical Decision Making

ISBN: 978-0324663853

5th edition

Authors: Steve Jackson, Roby Sawyers, Greg Jenkins

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Question Posted: Sep 20, 2017 10:40 AM

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Which of the following statements is not true? Companies that have higher fixed costs relative to variable

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Companies have a higher fixed costs relative to variable cost have a higher operating leverage yes t...View the full answer

Managerial Accounting A Focus on Ethical Decision Making

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