The degree of operating leverage may be defined as
A) the percent change in operating income divided by the percent change in unit volume.
B) Q(P − VC) divided by Q(P − VC) − FC.
C) S − TVC divided by S − TVC − FC.
D) All of the options are true.

Question

Quizplus · Accepted Answer

All the options provided (A, B, and C) are different ways to express the degree of operating leverage, which measures the sensitivity of a company's operating income to its sales volume.

The Degree of Operating Leverage May Be Defined as