Question
Please select all of the following that are true regarding cost structure: 1. Within each relevant range of Q, before MES, total costs per unit
Please select all of the following that are true regarding cost structure:
1. Within each relevant range of Q, before MES, total costs per unit decline (a.k.a. economies of scale)
2. The more specific a fixed cost is for a type of sale, the more sunk the cost will be
3. As sales (Q) decline total variable costs remain constant
4. The net benefit from each sale is the contribution margin per unit
5. When cost structure tips towards VC, the contribution margin is lower (more difficult to breakeven) but the breakeven point is lower as well due to lower FC (easier to breakeven)
6. After the breakeven quantity is reached, contribution margin always increase over increasing quantity
7. The breakeven point is where the total contribution margin equals fixed cost
8. When the cost structure tips toward VC, the contribution margin is lower, so there is more risk from business failure since sunk costs are likely higher
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started