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3 years ago

All else being equal, a company with a low operating leverage will have:

Business

1 answer:

nlexa [21]3 years ago

5 0

Answer:

c) relatively high variable costs

Explanation:

Operating leverage is a ratio that is used to analyze and understand the cost structure of a business. It gives the relation between the variable and fixed cost to the the total cost of running the business.

A business with a large amount of fixed cost relative to variable is said to have a high operating leverage . For such business, operating income would be more volatile because the operating income would not increase in commensurate proportion as sales revenue.

And a company with low operating leverage has low amount of fixed cost relative to variable cost and therefore a relatively high variable costs

Operating leverage is calculated as

Contribution /Earnings before interest and Tax

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When total cost or total variable cost is increasing, there are increasing marginal returns to the variable input.

SVETLANKA909090 [29]

Answer:

The correct answer is (B) False.

Explanation:

Variable costs, as the name implies, differ with the level of production and are associated with the use of variable factors, such as labor and raw materials. Since the amounts of factors increase as production increases, variable costs increase when it does.

3 0

3 years ago

A company uses return on investment (ROI) to measure the performance of its business units. The company manufactures and distrib

dalvyx [7]

Answer: B. Decrease

Explanation:

Return on investment refers to the ratio between the net income and investment. It should be noted that a high return on investment implies that the investment's gains compare favourably to the cost.

In this scenario, since a large amount of raw material was bought in advance and stored in the manufacturing plant inventory, this will lead to an increase in the cost of production which therefore will reduce the return in investment.

Therefore, the correct option is B.

6 0

3 years ago

What is an organization that attempts to improve the image and working conditions of people in a particular occupation called?

Stels [109]

An organization that improves its working conditions would be a professional organization

4 0

3 years ago

Describe how the economy came to be dominated by giant "trusts" such as those headed by carnegie and rockefeller in the steel an

elixir [45]

I am not sure wish i could help

6 0

3 years ago

Bernie Company sells buttons to fabric stores. Sales are expected to be $2,046,299 in January, $2,484,001 in February and $3,162

Igoryamba

Answer:

$1,701,371

Explanation:

Gross Profit = Sales - Cost of Sales

therefore,

In percentage this equation can be expressed according to the Company policy as :

<em>46 % = 146 % - 100%</em>

Cost of Sales = 100/146 x $2,484,001 = $1,701,371

Conclusion :

Budgeted cost of goods sold for February is $1,701,371

3 0

3 years ago