The correct answer is: A. EBIT to the changes in sales.
Operating leverage is a measure of how much a company’s operating income (EBIT) changes in response to a change in sales. A company with high operating leverage has a high proportion of fixed costs, so a small change in sales can lead to a large change in EBIT. A company with low operating leverage has a low proportion of fixed costs, so a small change in sales can lead to a small change in EBIT.
Option B is incorrect because EPS is a measure of a company’s profitability, not its operating leverage. EPS is calculated by dividing EBIT by the number of shares outstanding.
Option C is incorrect because production is a measure of a company’s output, not its operating leverage. Production is calculated by multiplying the number of units produced by the unit price.
Option D is incorrect because operating leverage is a measure of a company’s operating income, not its sales, production, or EPS.