Final answer:
Linear break-even analysis and operating leverage are valid within a relevant range of production.
Step-by-step explanation:
Linear break-even analysis and operating leverage are valid within a relevant range of production.
Linear break-even analysis is a tool used to calculate the level of production or sales at which a company's total revenue equals its total costs, resulting in no profit or loss. It assumes that costs and revenues are linearly related and that there are no changes in the cost structure within the relevant range.
Operating leverage measures the relationship between fixed costs and variable costs in a company's cost structure. It shows how changes in sales volume affect a company's profitability. Operating leverage is only valid within a relevant range, as it assumes that fixed costs and variable costs remain constant within that range.