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Unformatted text preview: E4-1 Operating Leverage [LO 5]
John Diaz owns Pacific Electric, a large electrical contracting firm that provides services to
building construction projects. The company has 2,000 employees and operates in three western
states. Recently the company experienced large losses due to a downturn in the economy and a
slowdown in construction. John thinks the losses were particularly large because his company
has too much fixed cost. Expand on John's thought. How are the large losses related to fixed costs? Identify a way that John can turn potential fixed costs into variable costs. ...
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This note was uploaded on 06/21/2011 for the course MANAGERIAL MT425 taught by Professor Hodgson,k during the Spring '11 term at Kaplan University.
- Spring '11