A company with a degree of operating leverage of 4 would expect income to increase by 200% if sales increased from $100,000 to $150,000.
Increase in Sales is 50% so income increases 50%*4.

Question

Quizplus · Accepted Answer

The company's degree of operating leverage of 4 means that a 50% increase in sales would result in a 200% increase in income (50% x 4). Therefore, the statement is true.

A Company with a Degree of Operating Leverage of 4