Operating leverage refers to:
✓ Correct Answer: Option B
High operating leverage: large fixed costs relative to variable costs. Small revenue change → disproportionately large change in operating income. DOL = % change in EBIT / % change in Sales.
High operating leverage: large fixed costs relative to variable costs. Small revenue change → disproportionately large change in operating income. DOL = % change in EBIT / % change in Sales.