Match the following with the items below:
a. break-even analysis
b. combined leverage
c. contribution margin
d. degree of combined leverage
e. degree of financial leverage
f. degree of operating leverage
g. financial leverage
h. fixed costs
i. leverage (concept in general)
j. nonlinear break-even analysis
k. operating leverage
l. variable costs
1. _____ A reflection of the extent fixed assets and fixed costs are utilized in the business firm.
2. _____ The amount of fixed costs covered by each unit of sales. This amount is derived by subtracting variable costs from the sales price of each unit.
3. _____ Costs that move directly with a change in volume.
4. _____ A measure of the impact of fixed costs on earnings from the operations viewpoint of the firm.
5. _____ A numerical and graphical technique used to determine at what point the firm will equate its costs and revenues.
6. _____ The use of fixed charge obligations with the intent of magnifying the potential returns to the owners of the firm.
7. _____ A measure of the amount of debt used in the capital structure of the firm.
8. _____ Costs that remain relatively constant regardless of the volume of sales
9. _____ A measure of the impact of debt on the earnings capability of the firm.
10. _____ The total impact of operating and financial leverage.
11. _____ The use of break-even analysis based on the assumption that cost and revenue relationships to quantity sold may vary at different levels of sales.
12. _____ A measure of the total effect on earnings per share of operating and financial leverage.