The accounting manager of gateway inns has noted that every time the inn s average

26.15

Explanation: The degree of operating leverage is calculated as the percentage change in operating income in relation to a percentage change in sales.

Thus the degree of operating leverage of Gateway inn is calculated thus:

DOL = Cont Margin/Operating income

DOL = 47/(4.6-3.3)

DOL = 47/1.3

DOL= 26.15

The correct answer is letter "B": The LRAC curve represents the least-cost input combination of inputs for producing each level of output.

Explanation:

Presuming that all factors for production are available, the long-run average cost (LRAC) curve portraits the lowest cost per unit of the company at each output level. The approach also presumes that the company has selected the production optimal factor mix.