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Only revenues and fixed costs are linear.
Only revenues and variable costs are linear.
Variable cost per unit decreases because of increases in
productivity.
Both revenues and total costs are linear.
Question 8. Question : The degree of operating leverage
(DOL), at any sales volume, is
equal to:
Student Answer:
(Operating profit - fixed expenses) ÷ sales.
(Sales - variable expenses) ÷ operating profit.
Operating profit ÷ (fixed expenses - variable expenses).
Sales ÷ (fixed expenses - operating profit).
Fixed costs ÷ Total contribution margin.
Question 9. Question : Sales forecasts are the first step in the
budgeting process of a
merchandising firm because:
Student Answer: