If a profitable company has both fixed and variable costs, its operating leverage will always be greater than 1.
Answer the following statement true (T) or false (F)
True
Recall that magnitude of operating leverage equals contribution margin divided by net income.
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What factors make discretionary costs difficult to control?
Refer to the selected data provided for Max's Tire Center. Which of the following would result from a vertical analysis of Max's balance sheet in 2012?
A) Fixed assets increased $12,000 or 7.14% during 2012. B) Total assets is $500,000 in 2012. C) Fixed assets is 27.6% of total assets in 2012. D) Fixed assets is 30% of total assets in 2012.
A term describing a firm's normal range of operating activities is:
A. Margin of safety of operations. B. Relevant operating analysis. C. High-low level of operations. D. Relevant range of operations. E. Break-even level of operations.
Which of the following is an assumption of the economic order quantity model?
a. Multiple products are involved. b. Demand is not known. c. Shortages are allowed. d. Quantity ordered is received all at once in a single delivery.