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Is there any relationship between breakeven analysis and operating leverage? Explain.
A labor-intensive company will have low fixed costs and a correspondingly low break-even point. However, the impact of operating leverage on the firm is small and there will be little magnification of profits as volume increases. [ A capital-intensive firm, on the other hand, will have a higher break-even point and enjoy the positive influences of operating leverage as volume increases. Read more: ]
Expert answered|shifa saleheen|Points 9525|
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Asked 2/18/2012 4:40:51 PM
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How is breakeven analysis beneficial to management and planning?
Weegy: It is beneficial in this sense that at the start of fiscal or production year management can get the information that how many units of product they need to sell to atleast recover the cost of product. [ So in this sense they can also get the information that to get certain percentage of profit how many units of products they need to sell. Read more: ] (More)
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Asked 2/18/2012 4:16:27 PM
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