Operating leverage is equal to __________________.

\frac{R e v e n u e + v a r i a b l e c o s t s}{R e v e n u e + v a r i a b l e c o s t s + f i x e d c o s t s}

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\frac{R e v e n u e \div v a r i a b l e c o s t s}{V a r i a b l e c o s t s \div f i x e d c o s t s}

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\frac{P e r c e n t a g e c h a n g e i n e a r i n g s b e f o r e i n t e r e s t a n d t a x e s}{P e r c e n t a g e c h a n g e i n q u a n t i t y p r o d u c e d a n d s o l d}

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\frac{R e v e n u e - V a r i a b l e c o s t s}{R e v e n u e - v a r i a b l e c o s t s - f i x e d c o s t s}

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Solution

The correct option is D $\frac{R e v e n u e - V a r i a b l e c o s t s}{R e v e n u e - v a r i a b l e c o s t s - f i x e d c o s t s}$
Operating leverage is a cost-accounting formula that measures the degree to which a firm or project can increase operating income by increasing revenue. A business that generates sales with a high gross margin and low variable costs has high operating leverage.

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