Asked by
Kayla Melgarejo
on Oct 11, 2024
Verified
Using the degree of operating leverage, the estimated percent increase in net operating income as the result of a 5% increase in sales is closest to:
A) 0.29%
B) 87.50%
C) 0.11%
D) 218.75%
Operating Leverage
A financial metric that indicates how a company's operating income reacts to a change in sales volume, showing the degree of fixed versus variable costs.
Sales Increase
A rise in the amount of goods or services sold, often measured as a percentage increase over a previous period.
- Acquire knowledge on the principle and computational process of the degree of operating leverage.
- Investigate the consequence of sales volume modifications on net operating income.
Verified Answer
TL
Learning Objectives
- Acquire knowledge on the principle and computational process of the degree of operating leverage.
- Investigate the consequence of sales volume modifications on net operating income.
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