The effect of the change in the quantity on EBIT
The effect of the change in EBIT on the EPS of the company
The effect of the change in output to the EPS of the company
The effect of change in EPS on the output of the company
✅ The correct answer is A.
Operating leverage examines the effect of the change in the quantity on EBIT. 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.
Operating leverage examines the effect of the change in the quantity on EBIT. 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.