The concept of operating leverage involves the use of fixed costs to magnify returns at high levels of operation.
The term fixed costs alludes to an expense that doesn't change with an increment or reduction in the quantity of labor and products delivered or sold. These must be paid paid by an organization, free particular business exercises.
Formula of Fixed costs:- Total costs of production- Variable costs per unit x number of units produced.
Operating Leverages is a bookkeeping equation that actions how much a firm or venture can increment working pay by expanding income.
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