I. Define Operating Leverage

i. Define operating leverage.
ii. The firm is planning to increase the selling price. If sales volume in units does not change, what will happen to the operating leverage factor? (Assume the firm pays no income taxes.) Explain.
iii. The firm is planning to increase fixed manufacturing costs and decrease variable manufacturing costs per unit. At the present volume of production, the total manufacturing costs will be unchanged. What will this change do to the operating leverage factor? (Assume no income taxes.) Explain.

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i. Operating leverage is contribution ma...

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