Operating risk is most likely to increase as a result

of:

A An increase in sale risk Correct Answer Incorrect Answer

B Increase in the variability of cost Correct Answer Incorrect Answer

C An increase in fixed production cost Correct Answer Incorrect Answer

D An increase in the total cost Correct Answer Incorrect Answer

E None of the above Correct Answer Incorrect Answer

Solution

Operating risk refers to the uncertainty about operating earnings arising from fixed (operating) costs.

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