Q223
Operating Leverage is the response of changes in __________
A.
EBIT to the changes in sales
AnswerB.
EPS to the changes in EBIT
C.
Production to the changes in sales
D.
None of the above
Answer: Option A
Solution
Answer: Option A
Solution:
Operating Leverage is the response of changes in EBIT to the changes in sales. Operating leverage is a cost-accounting formula that measures the degree to which a firm or project can increase operating income by increasing revenue.