Prepare income statement of University O and University D.

Question

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Answer 1

Question

Chapter 11, Problem 26P

a

To determine

Prepare income statement of University O and University D.

a

Expert Solution

Explanation of Solution

Income statement:

Income statement is the financial statement of a company which shows all the revenues earned and expenses incurred by the company over a period of time.

Given information:

University O pays the instructor $4,600 per course and $230 per student for each enrolment in the class by University D. Both the universities charges $400 as tuition fee per course attended.

The formula to calculate the net income:

Net income=Revenue−Cost

Prepare income statement of University K and University D:

Note: Assume that 20 students attend the courses

The cost of University K is fixed at $4,600 and University D is variable at (20×$250=$5,000)

University	O		D
Tuition revenue (20 students × $400 per student)	$ 8,000		$ 8,000
Total cost of instruction	($ 4,600)	(20 × $230)	($ 4,600)
Net income	$ 3,400		$ 3,400

Table (1)

b

To determine

Prepare an income statement for University O, assuming that the university is successful and enrols 40 students in its course.

b

Expert Solution

Explanation of Solution

Given information:

The tuition fee is reduced to $220 by University O and enrolled 40 students to the course.

Prepare income statement of University O:

University	O
Tuition revenue (40 × $220)	$8,800
Total cost of instruction (fixed)	($4,600)
Net income	$4,200

Table (2)

c

To determine

Prepare an income statement for University D, assuming that the university is successful and enrols 40 students in its course.

c

Expert Solution

Explanation of Solution

Given information:

The tuition fee is reduced to $220 by University D and enrolled 40 students to the course.

University		D
Tuition revenue	(40 × $220)	$ 8,800
Total cost of instruction (variable)	(40 × $230)	($ 9,200)
Net income (loss)		($ 400)

Table (3)

d

To determine

Explain the reason for profit in part b) and loss in part c)

d

Expert Solution

Explanation of Solution

Fixed cost remains constant when volume of activity changes but per unit value will change inversely with change in volume of the activity.

Variable cost will change proportionately or directly with the change in the volume of the activity on the other hand per unit value will remain constant irrespective of the change in volume of activity.

The cost of University O is fixed. So, rise in the number of students did not raise the total cost of instruction.

On the other hand, the University D cost is variable as when the number of students increase will lead to increase in total cost of instruction. Thus, the revenue in University D is insufficient to cover the increase in cost and leads to the loss.

e

To determine

Prepare income statement of University O and University D.

e

Expert Solution

Explanation of Solution

Given information:

Prepare income statement of University O and University D:

10 Students attend the course on original fee $450.

University	O		D
Tuition revenue (10 × $400)	4,000		4,000
Total cost of instruction	(4,600)	(10 × $230)	(2,300)
Net income (loss)	(600)		1,700

Table (4)

The cost of University O is fixed at $4,600 and University D is variable at (10×$230=$2,300)

f

To determine

Justify the given statement is false

f

Expert Solution

Explanation of Solution

Given statement:

It is better to have a fixed cost rather than the variable cost.

Justification:

Fixed is not better always than the variable cost because the loss of the company can be avoided if cost is variable. That is if the volume is not sufficient to produce the revenue the company will incur loss like part e), simply above the fixed cost level.

Thus, it is not better to have a fixed cost rather than the variable cost.

g

To determine

Justify the given statement is false

g

Expert Solution

Explanation of Solution

Given statement:

It is better to have a variable cost rather than the fixed cost.

Justification:

When revenue per unit of the company is less than the variable cost per unit of the company, the enterprises will produce extra loss of each unit sold or produced. This is illustrated in Part c). In part b) the lower per unit revenue will be compensated by the increase in sales volume if the cost is fixed.

Thus, it is not better to have a variable cost rather than the fixed cost.

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Answer 2

Question

Chapter 11, Problem 26P

a

To determine

Prepare income statement of University O and University D.

a

Expert Solution

Explanation of Solution

Income statement:

Income statement is the financial statement of a company which shows all the revenues earned and expenses incurred by the company over a period of time.

Given information:

University O pays the instructor $4,600 per course and $230 per student for each enrolment in the class by University D. Both the universities charges $400 as tuition fee per course attended.

The formula to calculate the net income:

Net income=Revenue−Cost

Prepare income statement of University K and University D:

Note: Assume that 20 students attend the courses

The cost of University K is fixed at $4,600 and University D is variable at (20×$250=$5,000)

University	O		D
Tuition revenue (20 students × $400 per student)	$ 8,000		$ 8,000
Total cost of instruction	($ 4,600)	(20 × $230)	($ 4,600)
Net income	$ 3,400		$ 3,400

Table (1)

b

To determine

Prepare an income statement for University O, assuming that the university is successful and enrols 40 students in its course.

b

Expert Solution

Explanation of Solution

Given information:

The tuition fee is reduced to $220 by University O and enrolled 40 students to the course.

Prepare income statement of University O:

University	O
Tuition revenue (40 × $220)	$8,800
Total cost of instruction (fixed)	($4,600)
Net income	$4,200

Table (2)

c

To determine

Prepare an income statement for University D, assuming that the university is successful and enrols 40 students in its course.

c

Expert Solution

Explanation of Solution

Given information:

The tuition fee is reduced to $220 by University D and enrolled 40 students to the course.

University		D
Tuition revenue	(40 × $220)	$ 8,800
Total cost of instruction (variable)	(40 × $230)	($ 9,200)
Net income (loss)		($ 400)

Table (3)

d

To determine

Explain the reason for profit in part b) and loss in part c)

d

Expert Solution

Explanation of Solution

Fixed cost remains constant when volume of activity changes but per unit value will change inversely with change in volume of the activity.

Variable cost will change proportionately or directly with the change in the volume of the activity on the other hand per unit value will remain constant irrespective of the change in volume of activity.

The cost of University O is fixed. So, rise in the number of students did not raise the total cost of instruction.

On the other hand, the University D cost is variable as when the number of students increase will lead to increase in total cost of instruction. Thus, the revenue in University D is insufficient to cover the increase in cost and leads to the loss.

e

To determine

Prepare income statement of University O and University D.

e

Expert Solution

Explanation of Solution

Given information:

Prepare income statement of University O and University D:

10 Students attend the course on original fee $450.

University	O		D
Tuition revenue (10 × $400)	4,000		4,000
Total cost of instruction	(4,600)	(10 × $230)	(2,300)
Net income (loss)	(600)		1,700

Table (4)

The cost of University O is fixed at $4,600 and University D is variable at (10×$230=$2,300)

f

To determine

Justify the given statement is false

f

Expert Solution

Explanation of Solution

Given statement:

It is better to have a fixed cost rather than the variable cost.

Justification:

Fixed is not better always than the variable cost because the loss of the company can be avoided if cost is variable. That is if the volume is not sufficient to produce the revenue the company will incur loss like part e), simply above the fixed cost level.

Thus, it is not better to have a fixed cost rather than the variable cost.

g

To determine

Justify the given statement is false

g

Expert Solution

Explanation of Solution

Given statement:

It is better to have a variable cost rather than the fixed cost.

Justification:

When revenue per unit of the company is less than the variable cost per unit of the company, the enterprises will produce extra loss of each unit sold or produced. This is illustrated in Part c). In part b) the lower per unit revenue will be compensated by the increase in sales volume if the cost is fixed.

Thus, it is not better to have a variable cost rather than the fixed cost.

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Answer 3

Question

Chapter 11, Problem 26P

a

To determine

Prepare income statement of University O and University D.

a

Expert Solution

Explanation of Solution

Income statement:

Income statement is the financial statement of a company which shows all the revenues earned and expenses incurred by the company over a period of time.

Given information:

University O pays the instructor $4,600 per course and $230 per student for each enrolment in the class by University D. Both the universities charges $400 as tuition fee per course attended.

The formula to calculate the net income:

Net income=Revenue−Cost

Prepare income statement of University K and University D:

Note: Assume that 20 students attend the courses

The cost of University K is fixed at $4,600 and University D is variable at (20×$250=$5,000)

University	O		D
Tuition revenue (20 students × $400 per student)	$ 8,000		$ 8,000
Total cost of instruction	($ 4,600)	(20 × $230)	($ 4,600)
Net income	$ 3,400		$ 3,400

Table (1)

b

To determine

Prepare an income statement for University O, assuming that the university is successful and enrols 40 students in its course.

b

Expert Solution

Explanation of Solution

Given information:

The tuition fee is reduced to $220 by University O and enrolled 40 students to the course.

Prepare income statement of University O:

University	O
Tuition revenue (40 × $220)	$8,800
Total cost of instruction (fixed)	($4,600)
Net income	$4,200

Table (2)

c

To determine

Prepare an income statement for University D, assuming that the university is successful and enrols 40 students in its course.

c

Expert Solution

Explanation of Solution

Given information:

The tuition fee is reduced to $220 by University D and enrolled 40 students to the course.

University		D
Tuition revenue	(40 × $220)	$ 8,800
Total cost of instruction (variable)	(40 × $230)	($ 9,200)
Net income (loss)		($ 400)

Table (3)

d

To determine

Explain the reason for profit in part b) and loss in part c)

d

Expert Solution

Explanation of Solution

Fixed cost remains constant when volume of activity changes but per unit value will change inversely with change in volume of the activity.

Variable cost will change proportionately or directly with the change in the volume of the activity on the other hand per unit value will remain constant irrespective of the change in volume of activity.

The cost of University O is fixed. So, rise in the number of students did not raise the total cost of instruction.

On the other hand, the University D cost is variable as when the number of students increase will lead to increase in total cost of instruction. Thus, the revenue in University D is insufficient to cover the increase in cost and leads to the loss.

e

To determine

Prepare income statement of University O and University D.

e

Expert Solution

Explanation of Solution

Given information:

Prepare income statement of University O and University D:

10 Students attend the course on original fee $450.

University	O		D
Tuition revenue (10 × $400)	4,000		4,000
Total cost of instruction	(4,600)	(10 × $230)	(2,300)
Net income (loss)	(600)		1,700

Table (4)

The cost of University O is fixed at $4,600 and University D is variable at (10×$230=$2,300)

f

To determine

Justify the given statement is false

f

Expert Solution

Explanation of Solution

Given statement:

It is better to have a fixed cost rather than the variable cost.

Justification:

Fixed is not better always than the variable cost because the loss of the company can be avoided if cost is variable. That is if the volume is not sufficient to produce the revenue the company will incur loss like part e), simply above the fixed cost level.

Thus, it is not better to have a fixed cost rather than the variable cost.

g

To determine

Justify the given statement is false

g

Expert Solution

Explanation of Solution

Given statement:

It is better to have a variable cost rather than the fixed cost.

Justification:

When revenue per unit of the company is less than the variable cost per unit of the company, the enterprises will produce extra loss of each unit sold or produced. This is illustrated in Part c). In part b) the lower per unit revenue will be compensated by the increase in sales volume if the cost is fixed.

Thus, it is not better to have a variable cost rather than the fixed cost.

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Answer 4

Question

Chapter 11, Problem 26P

a

To determine

Prepare income statement of University O and University D.

a

Expert Solution

Explanation of Solution

Income statement:

Income statement is the financial statement of a company which shows all the revenues earned and expenses incurred by the company over a period of time.

Given information:

University O pays the instructor $4,600 per course and $230 per student for each enrolment in the class by University D. Both the universities charges $400 as tuition fee per course attended.

The formula to calculate the net income:

Net income=Revenue−Cost

Prepare income statement of University K and University D:

Note: Assume that 20 students attend the courses

The cost of University K is fixed at $4,600 and University D is variable at (20×$250=$5,000)

University	O		D
Tuition revenue (20 students × $400 per student)	$ 8,000		$ 8,000
Total cost of instruction	($ 4,600)	(20 × $230)	($ 4,600)
Net income	$ 3,400		$ 3,400

Table (1)

b

To determine

Prepare an income statement for University O, assuming that the university is successful and enrols 40 students in its course.

b

Expert Solution

Explanation of Solution

Given information:

The tuition fee is reduced to $220 by University O and enrolled 40 students to the course.

Prepare income statement of University O:

University	O
Tuition revenue (40 × $220)	$8,800
Total cost of instruction (fixed)	($4,600)
Net income	$4,200

Table (2)

c

To determine

Prepare an income statement for University D, assuming that the university is successful and enrols 40 students in its course.

c

Expert Solution

Explanation of Solution

Given information:

The tuition fee is reduced to $220 by University D and enrolled 40 students to the course.

University		D
Tuition revenue	(40 × $220)	$ 8,800
Total cost of instruction (variable)	(40 × $230)	($ 9,200)
Net income (loss)		($ 400)

Table (3)

d

To determine

Explain the reason for profit in part b) and loss in part c)

d

Expert Solution

Explanation of Solution

Fixed cost remains constant when volume of activity changes but per unit value will change inversely with change in volume of the activity.

Variable cost will change proportionately or directly with the change in the volume of the activity on the other hand per unit value will remain constant irrespective of the change in volume of activity.

The cost of University O is fixed. So, rise in the number of students did not raise the total cost of instruction.

On the other hand, the University D cost is variable as when the number of students increase will lead to increase in total cost of instruction. Thus, the revenue in University D is insufficient to cover the increase in cost and leads to the loss.

e

To determine

Prepare income statement of University O and University D.

e

Expert Solution

Explanation of Solution

Given information:

Prepare income statement of University O and University D:

10 Students attend the course on original fee $450.

University	O		D
Tuition revenue (10 × $400)	4,000		4,000
Total cost of instruction	(4,600)	(10 × $230)	(2,300)
Net income (loss)	(600)		1,700

Table (4)

The cost of University O is fixed at $4,600 and University D is variable at (10×$230=$2,300)

f

To determine

Justify the given statement is false

f

Expert Solution

Explanation of Solution

Given statement:

It is better to have a fixed cost rather than the variable cost.

Justification:

Fixed is not better always than the variable cost because the loss of the company can be avoided if cost is variable. That is if the volume is not sufficient to produce the revenue the company will incur loss like part e), simply above the fixed cost level.

Thus, it is not better to have a fixed cost rather than the variable cost.

g

To determine

Justify the given statement is false

g

Expert Solution

Explanation of Solution

Given statement:

It is better to have a variable cost rather than the fixed cost.

Justification:

When revenue per unit of the company is less than the variable cost per unit of the company, the enterprises will produce extra loss of each unit sold or produced. This is illustrated in Part c). In part b) the lower per unit revenue will be compensated by the increase in sales volume if the cost is fixed.

Thus, it is not better to have a variable cost rather than the fixed cost.

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Answer 5

Chapter 11, Problem 26P

a

To determine

Prepare income statement of University O and University D.

a

Expert Solution

Explanation of Solution

Income statement:

Income statement is the financial statement of a company which shows all the revenues earned and expenses incurred by the company over a period of time.

Given information:

University O pays the instructor $4,600 per course and $230 per student for each enrolment in the class by University D. Both the universities charges $400 as tuition fee per course attended.

The formula to calculate the net income:

Net income=Revenue−Cost

Prepare income statement of University K and University D:

Note: Assume that 20 students attend the courses

The cost of University K is fixed at $4,600 and University D is variable at (20×$250=$5,000)

University	O		D
Tuition revenue (20 students × $400 per student)	$ 8,000		$ 8,000
Total cost of instruction	($ 4,600)	(20 × $230)	($ 4,600)
Net income	$ 3,400		$ 3,400

Table (1)

b

To determine

Prepare an income statement for University O, assuming that the university is successful and enrols 40 students in its course.

b

Expert Solution

Explanation of Solution

Given information:

The tuition fee is reduced to $220 by University O and enrolled 40 students to the course.

Prepare income statement of University O:

University	O
Tuition revenue (40 × $220)	$8,800
Total cost of instruction (fixed)	($4,600)
Net income	$4,200

Table (2)

c

To determine

Prepare an income statement for University D, assuming that the university is successful and enrols 40 students in its course.

c

Expert Solution

Explanation of Solution

Given information:

The tuition fee is reduced to $220 by University D and enrolled 40 students to the course.

University		D
Tuition revenue	(40 × $220)	$ 8,800
Total cost of instruction (variable)	(40 × $230)	($ 9,200)
Net income (loss)		($ 400)

Table (3)

d

To determine

Explain the reason for profit in part b) and loss in part c)

d

Expert Solution

Explanation of Solution

Fixed cost remains constant when volume of activity changes but per unit value will change inversely with change in volume of the activity.

Variable cost will change proportionately or directly with the change in the volume of the activity on the other hand per unit value will remain constant irrespective of the change in volume of activity.

The cost of University O is fixed. So, rise in the number of students did not raise the total cost of instruction.

On the other hand, the University D cost is variable as when the number of students increase will lead to increase in total cost of instruction. Thus, the revenue in University D is insufficient to cover the increase in cost and leads to the loss.

e

To determine

Prepare income statement of University O and University D.

e

Expert Solution

Explanation of Solution

Given information:

Prepare income statement of University O and University D:

10 Students attend the course on original fee $450.

University	O		D
Tuition revenue (10 × $400)	4,000		4,000
Total cost of instruction	(4,600)	(10 × $230)	(2,300)
Net income (loss)	(600)		1,700

Table (4)

The cost of University O is fixed at $4,600 and University D is variable at (10×$230=$2,300)

f

To determine

Justify the given statement is false

f

Expert Solution

Explanation of Solution

Given statement:

It is better to have a fixed cost rather than the variable cost.

Justification:

Fixed is not better always than the variable cost because the loss of the company can be avoided if cost is variable. That is if the volume is not sufficient to produce the revenue the company will incur loss like part e), simply above the fixed cost level.

Thus, it is not better to have a fixed cost rather than the variable cost.

g

To determine

Justify the given statement is false

g

Expert Solution

Explanation of Solution

Given statement:

It is better to have a variable cost rather than the fixed cost.

Justification:

When revenue per unit of the company is less than the variable cost per unit of the company, the enterprises will produce extra loss of each unit sold or produced. This is illustrated in Part c). In part b) the lower per unit revenue will be compensated by the increase in sales volume if the cost is fixed.

Thus, it is not better to have a variable cost rather than the fixed cost.

Answer 6

Chapter 11, Problem 26P

a

To determine

Prepare income statement of University O and University D.

a

Expert Solution

Explanation of Solution

Income statement:

Income statement is the financial statement of a company which shows all the revenues earned and expenses incurred by the company over a period of time.

Given information:

University O pays the instructor $4,600 per course and $230 per student for each enrolment in the class by University D. Both the universities charges $400 as tuition fee per course attended.

The formula to calculate the net income:

Net income=Revenue−Cost

Prepare income statement of University K and University D:

Note: Assume that 20 students attend the courses

The cost of University K is fixed at $4,600 and University D is variable at (20×$250=$5,000)

University	O		D
Tuition revenue (20 students × $400 per student)	$ 8,000		$ 8,000
Total cost of instruction	($ 4,600)	(20 × $230)	($ 4,600)
Net income	$ 3,400		$ 3,400

Table (1)

Answer 7

Chapter 11, Problem 26P

a

To determine

Prepare income statement of University O and University D.

Answer 8

a

Expert Solution

Explanation of Solution

Income statement:

Income statement is the financial statement of a company which shows all the revenues earned and expenses incurred by the company over a period of time.

Given information:

University O pays the instructor $4,600 per course and $230 per student for each enrolment in the class by University D. Both the universities charges $400 as tuition fee per course attended.

The formula to calculate the net income:

Net income=Revenue−Cost

Prepare income statement of University K and University D:

Note: Assume that 20 students attend the courses

The cost of University K is fixed at $4,600 and University D is variable at (20×$250=$5,000)

University	O		D
Tuition revenue (20 students × $400 per student)	$ 8,000		$ 8,000
Total cost of instruction	($ 4,600)	(20 × $230)	($ 4,600)
Net income	$ 3,400		$ 3,400

Table (1)

Answer 9

a

Expert Solution

Answer 10

a

Expert Solution

Answer 11

Expert Solution

Answer 12

b

To determine

Prepare an income statement for University O, assuming that the university is successful and enrols 40 students in its course.

b

Expert Solution

Explanation of Solution

Given information:

The tuition fee is reduced to $220 by University O and enrolled 40 students to the course.

Prepare income statement of University O:

University	O
Tuition revenue (40 × $220)	$8,800
Total cost of instruction (fixed)	($4,600)
Net income	$4,200

Table (2)

Answer 13

b

To determine

Prepare an income statement for University O, assuming that the university is successful and enrols 40 students in its course.

Answer 14

b

Expert Solution

Explanation of Solution

Given information:

The tuition fee is reduced to $220 by University O and enrolled 40 students to the course.

Prepare income statement of University O:

University	O
Tuition revenue (40 × $220)	$8,800
Total cost of instruction (fixed)	($4,600)
Net income	$4,200

Table (2)

Answer 15

b

Expert Solution

Answer 16

b

Expert Solution

Answer 17

Expert Solution

Answer 18

c

To determine

Prepare an income statement for University D, assuming that the university is successful and enrols 40 students in its course.

c

Expert Solution

Explanation of Solution

Given information:

The tuition fee is reduced to $220 by University D and enrolled 40 students to the course.

University		D
Tuition revenue	(40 × $220)	$ 8,800
Total cost of instruction (variable)	(40 × $230)	($ 9,200)
Net income (loss)		($ 400)

Table (3)

Answer 19

c

To determine

Prepare an income statement for University D, assuming that the university is successful and enrols 40 students in its course.

Answer 20

c

Expert Solution

Explanation of Solution

Given information:

The tuition fee is reduced to $220 by University D and enrolled 40 students to the course.

University		D
Tuition revenue	(40 × $220)	$ 8,800
Total cost of instruction (variable)	(40 × $230)	($ 9,200)
Net income (loss)		($ 400)

Table (3)

Answer 21

c

Expert Solution

Answer 22

c

Expert Solution

Answer 23

Expert Solution

Answer 24

d

To determine

Explain the reason for profit in part b) and loss in part c)

d

Expert Solution

Explanation of Solution

Fixed cost remains constant when volume of activity changes but per unit value will change inversely with change in volume of the activity.

Variable cost will change proportionately or directly with the change in the volume of the activity on the other hand per unit value will remain constant irrespective of the change in volume of activity.

The cost of University O is fixed. So, rise in the number of students did not raise the total cost of instruction.

On the other hand, the University D cost is variable as when the number of students increase will lead to increase in total cost of instruction. Thus, the revenue in University D is insufficient to cover the increase in cost and leads to the loss.

Answer 25

d

To determine

Explain the reason for profit in part b) and loss in part c)

Answer 26

d

Expert Solution

Explanation of Solution

Fixed cost remains constant when volume of activity changes but per unit value will change inversely with change in volume of the activity.

Variable cost will change proportionately or directly with the change in the volume of the activity on the other hand per unit value will remain constant irrespective of the change in volume of activity.

The cost of University O is fixed. So, rise in the number of students did not raise the total cost of instruction.

On the other hand, the University D cost is variable as when the number of students increase will lead to increase in total cost of instruction. Thus, the revenue in University D is insufficient to cover the increase in cost and leads to the loss.

Answer 27

d

Expert Solution

Answer 28

d

Expert Solution

Answer 29

Expert Solution

Answer 30

e

To determine

Prepare income statement of University O and University D.

e

Expert Solution

Explanation of Solution

Given information:

Prepare income statement of University O and University D:

10 Students attend the course on original fee $450.

University	O		D
Tuition revenue (10 × $400)	4,000		4,000
Total cost of instruction	(4,600)	(10 × $230)	(2,300)
Net income (loss)	(600)		1,700

Table (4)

The cost of University O is fixed at $4,600 and University D is variable at (10×$230=$2,300)

Answer 31

e

To determine

Prepare income statement of University O and University D.

Answer 32

e

Expert Solution

Explanation of Solution

Given information:

Prepare income statement of University O and University D:

10 Students attend the course on original fee $450.

University	O		D
Tuition revenue (10 × $400)	4,000		4,000
Total cost of instruction	(4,600)	(10 × $230)	(2,300)
Net income (loss)	(600)		1,700

Table (4)

The cost of University O is fixed at $4,600 and University D is variable at (10×$230=$2,300)

Answer 33

e

Expert Solution

Answer 34

e

Expert Solution

Answer 35

Expert Solution

Answer 36

f

To determine

Justify the given statement is false

f

Expert Solution

Explanation of Solution

Given statement:

It is better to have a fixed cost rather than the variable cost.

Justification:

Fixed is not better always than the variable cost because the loss of the company can be avoided if cost is variable. That is if the volume is not sufficient to produce the revenue the company will incur loss like part e), simply above the fixed cost level.

Thus, it is not better to have a fixed cost rather than the variable cost.

Answer 37

f

To determine

Justify the given statement is false

Answer 38

f

Expert Solution

Explanation of Solution

Given statement:

It is better to have a fixed cost rather than the variable cost.

Justification:

Fixed is not better always than the variable cost because the loss of the company can be avoided if cost is variable. That is if the volume is not sufficient to produce the revenue the company will incur loss like part e), simply above the fixed cost level.

Thus, it is not better to have a fixed cost rather than the variable cost.

Answer 39

f

Expert Solution

Answer 40

f

Expert Solution

Answer 41

Expert Solution

Answer 42

g

To determine

Justify the given statement is false

g

Expert Solution

Explanation of Solution

Given statement:

It is better to have a variable cost rather than the fixed cost.

Justification:

When revenue per unit of the company is less than the variable cost per unit of the company, the enterprises will produce extra loss of each unit sold or produced. This is illustrated in Part c). In part b) the lower per unit revenue will be compensated by the increase in sales volume if the cost is fixed.

Thus, it is not better to have a variable cost rather than the fixed cost.

Answer 43

g

To determine

Justify the given statement is false

Answer 44

g

Expert Solution

Explanation of Solution

Given statement:

It is better to have a variable cost rather than the fixed cost.

Justification:

When revenue per unit of the company is less than the variable cost per unit of the company, the enterprises will produce extra loss of each unit sold or produced. This is illustrated in Part c). In part b) the lower per unit revenue will be compensated by the increase in sales volume if the cost is fixed.

Thus, it is not better to have a variable cost rather than the fixed cost.