Asked by
Malaya Danyelle
on Nov 07, 2024
Verified
A project with a high degree of operating leverage has relatively high variable costs.
Operating Leverage
A measure of how revenue growth translates into growth in operating income, indicating a company's fixed versus variable costs.
Variable Costs
Expenses that change in proportion to the level of production or sales, such as raw materials and labor costs.
- Comprehend the principle of operating leverage and its influence on the financial outcome of a project.
- Acknowledge the correlation between variable and fixed costs and its effect on the production cycle.
Verified Answer
QJ
Learning Objectives
- Comprehend the principle of operating leverage and its influence on the financial outcome of a project.
- Acknowledge the correlation between variable and fixed costs and its effect on the production cycle.