Question: Company As costs are mostly variable, whereas Company Bs costs are mostly fixed. When sales increase, which company will tend to realize the greatest increase

Company A’s costs are mostly variable, whereas Company B’s costs are mostly fixed. When sales increase, which company will tend to realize the greatest increase in profits? Explain.

Step by Step Solution

★★★★★

3.48 Rating (165 Votes )

There are 3 Steps involved in it

1 Expert Approved Answer

Step: 1 Unlock

All other things equal Company B with its higher fi... View full answer

Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock

Step: 3 Unlock

Document Format (1 attachment)

104-B-M-A-C-V-P (785).docx

120 KBs Word File

Students Have Also Explored These Related Managerial Accounting Questions!

Explain how fixed manufacturing costs are treated under variable costing. How are fixed manufacturing costs treated under full costing?

Explain why single-tailed amphiphiles tend to form micelles whereas two-tailed amphiphiles tend to form bilayers.

Lubricating oil with a relative density of 0.9 and dynamic viscosity () of 0.05Pas is pumped at a rate of 20L/s from a tank at atmospheric pressure to a storage tank at a pressure of 50kPa (gauge)....

In all respects, Company A and Company B are identical except that Company As costs are mostly variable, whereas Company Bs costs are mostly fixed, When sales increase, which Company will tend to...

5. In all respects, company X and Company Y are identical except that Company Xs costs are mostly variable. Whereas Company Ys costs are mostly fixed. When sales increase, which company tend to...

Glossary: Break-even point The level of sales at which profit is zero. (p. 70) Contribution margin ratio (CM ratio) A ratio computed by dividing contribution margin by sales. (p. 75)...

Distinguish between (a) a variable cost, (b) a fixed cost, and (c) a mixed cost. What effect does an increase in volume have on Unit fixed costs Unit variable costs Total fixed costs Total variable...

Distinguish between (a) a variable cost, (b) a fixed cost, and (c) a mixed cost. What effect does an increase in volume have on Unit fixed costs? Unit variable costs? Total fixed costs? Total...

Questions: 1. What is the meaning of contribution margin ration? How is this ratio useful in planning business operations? 2. In all respects, Company A and Company B are identical except that...

What is the objective of input controls?

Exercise 2 JOHNSON HARDWARE STORE LTD. Land Prepaid expenses Accrued expenses payable Notes payable, due in 90 days Long-term debt Accumulated depreciation, building and equipment Marketable...

when assessing an internal auditor's objectivity, an auditor should... review the interal auditor's working papers

Yorks outstanding stock consists of 90,000 shares of noncumulative 7.5% preferred stock with a $5 par value and also 270,000 shares of common stock with a $1 par value. During its first four years of...

A Capital Projects Fund has outstanding encumbrances of $75,000 as of the end of the fiscal year. Assume that all resources in the Capital Projects Fund are considered to be restricted. How should...

A 3-phase capacitor bank is installed in a 13.8-kV primary distribution feeder. The 3-phase bank is constructed from three single phase banks connected in wye. Each single-phase bank is made up of...

You have been asked to watch a video to the link is attached. Also, after watching the video, you are required to make a summary of the video on only one page, be creative in recounting ideas, etc....

The City of McNeely sold bonds in the amount of $25,000,000 to finance the construction of a public health center. The bonds are serial bonds and were sold at par on July 1, 2017 the first day of a...

2. What is the Date field shortcut for entering the first day of the month? a. f b. m c. j

List and explain the two categories in task control.

List three quantitative financial measures of performance in a manufacturing organization of your choice.

List three quantitative financial measures of performance in a service organization of your choice.

Question 28 According to a study done by a university student, the probability a randomly selected individual will not cover his or her mouth when sneezing is 0.267. Suppose you sit on a bench in a...

Ch 04- Blueprint Problems - Analysis of Financial Statements Net plant and equipment. Total assets Accounts parable Accruals Notes payable Total current liabilities. Long-term debt Common stock...

The accompanying table lists the ages of acting award winners matched by the years in which the awards were won. Construct a scatterplot, find the value of the linear correlation coefficient r, and...