Operating leverage factor
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Operating leverage factor is at a given level of sales, the contribution margin divided by operating income; the operating leverage factor indicates the percentage change in operating income that will occur from a 1 % change in sales volume.
Definitions
According to Managerial Accounting by Braun, Tietz (5th edition),
- Operating leverage factor. At a given level of sales, the contribution margin divided by operating income; the operating leverage factor indicates the percentage change in operating income that will occur from a 1 % change in sales volume.
