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The _____ can be measured for a given level of sales by taking the ratio of contribution margin to operating income.
a. margin of safetyb. indifference pointc. percentage change in profitsd. unit contribution margine. degree of operating leverage

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Answer:

The degree of operating leverage can be measured for a given level of sales by taking the ratio of contribution margin to operating income.

The correct answer is D

Explanation:

The degree of operating leverage is the ratio of contribution to operating income. It is calculated as:

Degree of operating leverage = Contribution/Operating income

Where contribution = Sales - Variable cost

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