Answer:
c. has a greater proportion of fixed costs to variable costs.
Explanation:
Operating leverage refers to the how or the means through which firms or organization can increase their operating income by increasing their revenue generation. As a way, more quantity of goods has to be sold to make up the cost.
In other words, operating leverage is a way of determining a business break even point.
Answer: c. has a greater proportion of fixed costs to variable costs
Explanation: Operating leverage is a measure a firm’s fixed costs as a percentage of its total costs. In order words, it measures the amount of debt the firm uses in finance its operations.
A company with high operating leverage is one with a greater proportion of fixed costs to variable costs. As a result, the firm is affected by volume of sales each month (since it must attain sufficient sales volume to cover its substantial fixed costs) even though it earns a large profit on each incremental sale.
