What is the degree of operating leverage
Question:
The degree of operating leverage:
(a) can be computed by dividing total contribution margin by net income.
(b) provides a measure of the company's earnings volatility.
(c) affects a company's break-even point.
(d) All of the above.
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Fixed manufacturing overhead costs are recognized as: period costs under absorption costing.
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A high degree of operating leverage: Indicates that a company has a larger percentage of variable costs relative to its fixed costs.
The degree of operating leverage: can be computed by dividing total contribution margin by net income.
Calculate the operating breakeven point in units Use the degree of operating leverage (DOL) formula to calculate DOL.
When a company has a limited resource, it should apply additional capacity of that resource to providing more units of the product or service:
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Calculate the the weighted average cost of capital, current rate of return on a risk free asset, beta, and required return on market and interest rate for Ford
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