Survey Of Accounting
5th Edition
ISBN: 9781259631122
Author: Edmonds, Thomas P.
Publisher: Mcgraw-hill Education,
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Textbook Question
Chapter 11, Problem 8Q
9. Are companies with predominately fixed cost structures likely to be more profitable?
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Students have asked these similar questions
Which of the following costs are always incremental and relevant in decision analysis?
a)
Opportunity costs and sunk costs
b)
Avoidable costs and opportunity costs
c)
Only avoidable costs
d)
Avoidable costs and sunk costs
Which of the following will increase a company's breakeven point?
a)
reducing its total fixed costs
b)
increasing the selling price per unit
c)
increasing variable cost per unit
d)
increasing contribution margin per unit
Which of the following statements accurately describes the "relevant range?"
a.
The operation range in which fixed costs are expected to remain the same.
b.
The operation range in which the firm can earn a profit.
c.
The operation range which can satisfy unusual product demand.
d.
The operation range in which variable costs rise proportionately.
All other things the same, which of the following would be true of the contribution margin and variable costs of a company with high fixed costs and low variable costs as compared to a company with low fixed costs and high variable costs?
Contribution Margin
Variable Costs
A.
Higher
Higher
B.
Lower
Higher
C.
Higher
Lower
D.
Lower
Lower
Option A
Option B
Option C
Option D
Chapter 11 Solutions
Survey Of Accounting
Ch. 11 - 1.Define fixed cost and variable cost and give an...Ch. 11 - Prob. 2QCh. 11 - 3.Define the term operating leverage and explain...Ch. 11 - Prob. 4QCh. 11 - Prob. 5QCh. 11 - 6.If volume is increasing, would a company benefit...Ch. 11 - Explain the risk and rewards to a company that...Ch. 11 - 9.Are companies with predominately fixed cost...Ch. 11 - 10.How is the relevant range of activity related...Ch. 11 - Which cost structure has the greater risk?...
Ch. 11 - 14.The president of Bright Corporation tells you...Ch. 11 - Prob. 12QCh. 11 - Prob. 13QCh. 11 - Prob. 14QCh. 11 - Prob. 15QCh. 11 - Prob. 16QCh. 11 - Prob. 17QCh. 11 - Prob. 1ECh. 11 - Prob. 2ECh. 11 - Prob. 3ECh. 11 - Exercise 2-4A Determining total variable cost The...Ch. 11 - Prob. 5ECh. 11 - Prob. 6ECh. 11 - Prob. 7ECh. 11 - Prob. 8ECh. 11 - Prob. 9ECh. 11 - Prob. 10ECh. 11 - Prob. 11ECh. 11 - Prob. 12ECh. 11 - Prepare an income statement using the contribution...Ch. 11 - Prob. 14ECh. 11 - Prob. 15ECh. 11 - Prob. 16ECh. 11 - Prob. 17ECh. 11 - Prob. 18ECh. 11 - Prob. 19ECh. 11 - Prob. 20ECh. 11 - Prob. 21PCh. 11 - Prob. 22PCh. 11 - Problem 2-19A Context-sensitive nature of cost...Ch. 11 - Prob. 24PCh. 11 - Prob. 25PCh. 11 - Prob. 26PCh. 11 - Prob. 27PCh. 11 - Prob. 28PCh. 11 - Prob. 29PCh. 11 - Prob. 1ATCCh. 11 - Prob. 2ATCCh. 11 - Prob. 3ATCCh. 11 - Prob. 4ATCCh. 11 - Prob. 5ATC
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Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Similar questions
- Would an increase in variable costs per unit cause a company’s break-even point to increase or decrease? Explain why?arrow_forwardWould an increase in variable costs per unit cause a company’s break-even point to increase or decrease? Why?arrow_forwardIn a cost-volume-profit analysis, explain what happens at the break-even point and why companies do not want to remain at the break-even point.arrow_forward
- What does it mean to obtain a competitive advantage? What role does the cost management system play in helping to achieve this goal?arrow_forwardDiscuss the two factors affecting both sales and variable costs to which a change in contribution margin can be attributed.arrow_forwardWhy might management analyze product profitability?arrow_forward
- The high-low method and least-squares regression are used by managers to _____________________. A. decide whether to make or buy a component part B. minimize corporate tax liability C. maximize output D. estimate costsarrow_forwardWhich of the following is a disadvantage of outsourcing? A. freeing up capacity B. freeing up capital C. transferring production and technology risks D. limiting ability to upsize or downsize productionarrow_forwardWould each of the following increase, decrease, or have an indeterminant effect on a firms break-even point (unit sales)? a. The sales price increases with no change in unit costs. b. An increase in fixed costs is accompanied by a decrease in variable costs. c. Variable labor costs decline; other things are held constant.arrow_forward
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