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Degree of operating leverage

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Reference no: EM131160910

Please answer the 3 questions bellow :

1. Why is degree of operating leverage (DOL) important? Is it "good" to have a high degree of operating leverage? Does risk play a factor in your decision? How is knowing the degree of operating leverage helpful to managers?

2. Explain why some believe that absorption cost may provide incentive for managers to overproduce inventory

3. What is the one difference between the way costs are assigned under variable and absorption costing?

Reference no: EM131160910

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