1. Which of the following shows the degree of operating leverage?The percentage change in the sales volume as the result of the percentage change in cost of the goodssoldThe percentage change in the net income as the result of the percentage change in the variable costsThe percentage change in the sales volume as the result of the percentage change in the sales priceThe percentage change in the net inome as the result of the percentage change in the sales volumeThe percentage change in the operating income as the result of the percentage change in the salesvolume

The degree of financial leverage (DFL) is a financial metric that measures the sensitivity of a…

Answered: 1. Which of the following shows the…

Financial And Managerial Accounting

15th Edition

ISBN:9781337902663

Author:WARREN, Carl S.

Publisher:WARREN, Carl S.

Chapter21: Variable Costing For Management analysis

Section: Chapter Questions

Problem 10E: How is the quantity factor for an increase or a decrease in the amount of sales computed in using...

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Operating leverage measures the: O Change in profit when sales changes. O Change in Contibution when sales changes. O Change in BEP when fixed cost changes. O Change in BEP when sales changes.
Operating leverage measures the: 1. Change in profit when sales changes 2. change in contrribution when sales changes 3. change in BEP when fixed cost changes 4. change in BEP when sales changes
The degree of operating leverage (DOL) is interpreted as the ratio of the percentage change in net income to the percentage change in EBIT. Select one: True False
On a cost-volume-profit graph, when the Total Cost line is higher than the Total Revenue line, the difference represents Select one: O A. a positive return on the investment O B. a net loss O C. net income O D. not enough information is presented
Is the cost of sales under weighted average always greater than the cost of sales in FIFO?
The difference, (Total Revenue - Total Cost) or [(Unit Price x Quantity Sold) - (Fixed Cost + Variable Cost)], represents, O the break-even point O the profit equation O the sales ratio O the market share O the value equation
What analysis ensures that the income for the firm will cover its variable costs? a. ratio analysis b. financial analysis c. cost volume profit analysis d. sales analysis
The dollar amount of sales needed to achieve a target operating income is computed by dividingbtarget operating income by the contribution margin ratio True False
Which of the following statements is true? OA. When a large proportion of income is spent on a product or service, the more elastic the supply will be. Percentage change in price OB Elasticity of supply Percentage change in quantity supplied OC. Products or services in which inputs are readily available have a more elastic supply. OD. None of the above is true. hand written otherwise skip
What ratio indicates the percentage of each sales dollar that is available to cover fixed costs and to provide a profit? A. Margin of safety ratioB. Contribution margin ratioC. Costs and expenses ratioD. Profit ratio
Which one of the following is defined, at any given sales volume, as the ratio of the total contribution margin to operating profit at that sales volume?
What is economic surplus defined as? A) The total revenue earned by a firm B) The difference between total revenue and total costs C) The total amount of money available for investment D) The value of goods produced in excess of demand Correct Answer: B) The difference between total revenue and total costs

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