JOURNAL OF HIGHER EDUCATION THEORY AND PRACTICE

Curriculum Integration: Does the Degree of Operating Leverage Defy

Optimal Input Combinations?

Author(s): Samuel E. Enajero

Citation: Samuel E. Enajero, (2012) "Curriculum Integration: Does the Degree of Operating Leverage Defy

Optimal Input Combinations?," Journal of Higher Education Theory and Practice, Vol.12, Iss. 3, pp. 43 - 49

Article Type: Research paper

Publisher: North American Business Press

Abstract:

Fixed and variable inputs are analyzed in economic theories as well as management accounting. In

economic courses, optimal input combinations require that the ratios of marginal product to input price

be equal for all inputs. The degree of operating leverage (DOL) is a measure of the extent to which a

business firm substitutes fixed inputs for variable inputs to boost the contribution margin. It is shown that

the practice where a firm invests more in fixed inputs with no regards to relative input prices is a

violation of optimal input combinations. This is obvious if input substitution topics in economics and

business are integrated.