The contribution margin is divided to operate income to calculate ______________?
Correct answer: A. degree of operating leverage
- A. degree of operating leverage
- B. degree of change
- C. degree of change in margin
- D. degree of change in income
Explanation
The contribution margin divided by operating income measures the degree of operating leverage, showing how strongly operating income responds to sales changes.
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About Cost Accounting
Cost accounting measures and analyses the cost of producing goods or providing services for planning, control and pricing decisions. It covers direct and indirect costs, fixed and variable costs, job and process costing, break-even analysis, marginal costing, overhead allocation, and the difference between product cost and period cost.
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