1. Knowing what you now know about fixed and variable costs, assume that you read these two headlines:

Comcast (an internet supplier with high fixed and low variable costs in its internet operations) expects to sign up 200,000 new internet subscribers this month for $50 per month or $600 per year for a total increase in sales of $120,000,000 per year.

Kroger (a large grocery store operation with high variable costs) expects its sales to increase $120,000,000 this year.

Assume that in both situations the increase is within the relevant range of operations and no additional capacity will need to be added.Which of these two companies will benefit the most financially? Why?

Answer rating: 100% (QA)

Comcast would benefit the most financially Since Com... View the full answer