operating gearingForums › Ask ACCA Tutor Forums › Ask the Tutor ACCA FM Exams › operating gearingThis topic has 1 reply, 2 voices, and was last updated 9 years ago by John Moffat.Viewing 2 posts - 1 through 2 (of 2 total)AuthorPosts February 9, 2016 at 2:30 pm #299830 mansoorParticipantTopics: 423Replies: 541☆☆☆☆good evening2 firms have the following cost structures:Sales ——————- 5——–5 variable costs———(3)——-(1) fixed costs ————(1)——-(3) EBIT——————–1———-1what is the level of operating gearing in each.there are 3 ways to calculate op. gearing. and each gives a different answer. which one to use??fixed costs/variable costs==================1/3=======3/1 fixed costs/total costs=====================1/4=======3/4the answer is using fixed/total.please explainthank u February 9, 2016 at 3:26 pm #299834 John MoffatKeymasterTopics: 57Replies: 54754☆☆☆☆☆You can use either – there is no standard measure of operating gearing.If it is in Section A of the exam then the examiner would have to define which measure to use.AuthorPostsViewing 2 posts - 1 through 2 (of 2 total)You must be logged in to reply to this topic.Log In Username: Password: Keep me signed in Log In