Degree of Operating Leverage
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Description
A measure, at a given level of sales, of how a percentage change in sales will affect profits. The degree of operating leverage is computed by dividing contribution margin by net operating income.
Concept Prerequisite
Wikipedia Reference
http://en.wikipedia.org/wiki/Operating leverage
Learning Material
Covered in Topic(s)
| Cost Theory and Estimation |
| Cost-Volume Profit Relationships |