2A2G A DEGREE OF OPERATING LEVERAGE OF 3 AT 5,000 UNITS MEANS THAT A...

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CSO: 2A2b

LOS: 2A2g

A degree of operating leverage of 3 at 5,000 units means that a

a.

3% change in earnings before interest and taxes will cause a 3% change in sales.

b.

3% change in sales will cause a 3% change in earnings before interest and taxes.

c.

1% change in sales will cause a 3% change in earnings before interest and taxes.

d.

1% change in earnings before interest and taxes will cause a 3% change in sales.