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How to Calculate the Degree of Operating Leverage: Formula & Example

Instructions:

Choose an answer and hit 'next'. You will receive your score and answers at the end.

question 1 of 3

Degree of operating leverage measures the volatility of what?

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1. Which two variables do you need to determine degree of operating leverage?

2. Which of the following is the correct formula to determine % change in sales?

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About This Quiz & Worksheet

A business's degree of operating leverage tells the owner some important information about the health of their business. This quiz and worksheet cover the formulas necessary to calculate the degree of operating leverage.

Quiz & Worksheet Goals

This accounting quiz and worksheet will cover the following topics:

  • What is measured by the degree of operating leverage
  • The variables that help determine the degree of operating leverage
  • The formula for determining the percentage change in sales
  • Calculating the percentage change in operating income and sales
  • Finding the degree of operating leverage in an example

Skills Practiced

These assessments use the following skills:

  • Reading comprehension - ensure that you draw the most important information from the related lesson on the degree of operating leverage
  • Problem solving - use acquired knowledge to solve practice problems using the formulas for percentage changes in income and sales
  • Knowledge application - use your knowledge to answer questions about what the degree of operating leverage measures and what variables are necessary to find it

Additional Learning

Further your understanding of the degree of operating leverage by reviewing the lesson called How to Calculate the Degree of Operating Leverage: Formula & Example. The lesson covers the following:

  • Vocabulary terms like volatility and operating income
  • How to find the variables you need
  • What the degree of operating leverage tells you about a business
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