The _____ can be measured for a given level of sales by taking the ratio of contribution margin to operating income.
A) percentage change in profits
B) degree of operating leverage
C) indifference point
D) margin of safety
E) unit contribution margin

Question

Quizplus · Accepted Answer

The degree of operating leverage (DOL) measures the effect that a change in sales has on operating income. It can be calculated by dividing contribution margin by operating income. Therefore, the DOL can be measured for a given level of sales by taking the ratio of contribution margin to operating income.

The _____ Can Be Measured for a Given Level of Sales