When a company has at least some fixed costs, the degree of operating leverage is different at different levels of sales.

Question

Quizplus · Accepted Answer

This statement is true. The degree of operating leverage (DOL) is a measure of how sensitive a company's operating income is to changes in sales volume. When a company has fixed costs, changes in sales volume can cause significant changes in operating income due to the high operating leverage. As a result, the DOL is different at different levels of sales.

When a Company Has at Least Some Fixed Costs, the Degree