An effect of fixed cost to change in operating income is classified as
A. uncertain margin
B. certain margin
C. operating margin
D. operating leverage
Answer: Option D
Solution (By Examveda Team)
An effect of fixed cost to change in operating income is classified as operating leverage. Operating leverage is a cost-accounting formula that measures the degree to which a firm or project can increase operating income by increasing revenue. A business that generates sales with a high gross margin and low variable costs has high operating leverage.This Question Belongs to Management >> Management Accounting
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