Answered: The amount by which a company's sales…

The amount by which a company's sales can decline before losses are incurred is called the: degree of operating leverage. margin of safety. profit loss. contribution margin ratio.

Century 21 Accounting Multicolumn Journal

11th Edition

ISBN:9781337679503

Author:Gilbertson

Publisher:Gilbertson

Chapter17: Financial Statement Analysis

Section17.1: Vertical Analysis Of An Income Statement

Problem 4AYU

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Question

The amount by which a company's sales can decline before losses are incurred is called the:
degree of operating leverage.
margin of safety.
profit loss.
contribution margin ratio.

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PLEASE ANSWER ALL Write “True” if the statement is true and write “False” if the statement is false. The relevant range of activity is the activity level at which the company makes the highestamount profits. Fixed costs per unit decline as the activity level increase within the relevant range of activity. A period cost is defined as the cost incurred when asset is used up or sold for the purpose ofgenerating revenue. Opportunity costs could be defined as the revenue lost when one alternative is not taken infavor of another alternative.