Accounting: What the Numbers Mean 9th Edition by Wayne W McManus, Daniel F Viele, David H Marshall

Exercise 17

For the following questions, circle the best response. Answers are at the end of this chapter.

If the percentage change in operating income resulting from a given percentage change in sales is higher than the percentage change in sales itself, then

a. an increase in the selling price would not alter the contribution margin per unit.

b. variable costs per unit have increased.

c. variable costs have decreased in total.

d. the company has operating leverage.

e. the company has no fixed costs.