How is operating leverage related to cost structure?
What will be an ideal response?
Answers will vary
Cost structure refers to the proportion of a company's fixed and variable costs. A company that has a more fixed cost structure will have high operating leverage. That means that for a given change in sales volume, it will have a greater change in net income than a company with a more variable cost structure.
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Which of the following accounts are normally reported as noncurrent liabilities on a classified balance sheet?
a. Notes payable due in 5 years and bonds payable b. Interest payable and mortgage payable c. Income taxes payable and salaries payable d. Capital stock and accounts payable
After posting the entries to close all revenue and expense accounts, the Income Summary account of Cleaver Auto Services has a $4,100 debit balance. This result implies that Cleaver earned a net income of $4,100.
Answer the following statement true (T) or false (F)
Phillip was waiting for a bus at a bus stop. Across the street and down the block, a mechanic negligently overinflated a tire he was intending to put onto Marsha's pickup truck. The exploding tire injured Marsha and frightened a neighborhood dog, which ran down the street and knocked Phillip down, injuring his knee. Phillip sued the mechanic. In applying the Palsgraf v. Long Island Railroad Co
decision to this case, Phillip would a. win because the mechanic was negligent in overinflating the tire, which led to Phillip's injury. b. win based on negligence per se. c. lose because the court would apply the doctrine of res ipsa loquitur. d. lose because, although the mechanic's conduct was negligent toward Marsha, it was not a wrong in relation to Phillip, who was far away. The mechanic could not have foreseen injury to Phillip and therefore had no duty to him.
An important contributor to groupthink is when the group loses its power of critical analysis
Indicate whether the statement is true or false.