Question

An increase in the selling price per unit will decrease an organization's operating leverage, assuming sales unit volume doesn't change and there are no other changes in its cost structure.a) trueb) false

Answer 1

Answer:

a) true

Explanation:

This is true because, increasing the price of the product sold by an organisation directly lead to the reduction of the operating cost of the said organization, all other things being equal. For example, a glass manufacturing company increasing the selling price per unit glass from $40 to $90 will definitely lead to operating cost reduction.