Operating leverage works best when product volume is increasing.

Name: Operating leverage works best when product volume is increasing.
Brand: Quizplus
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Question

Quizplus · Accepted Answer

Operating leverage measures the proportion of fixed costs in a company's cost structure. When the volume of product increases, the fixed costs are spread over a higher number of units, resulting in higher margins and profits. Therefore, operating leverage works best when product volume is increasing.

Operating Leverage Works Best When Product Volume Is Increasing