Question
True/false Multiple regression analysis should be performed when a single independent variable influences multiple dependent variables. As activity increases, the fixed cost per unit increases
True/false
Multiple regression analysis should be performed when a single independent variable influences multiple dependent variables.
As activity increases, the fixed cost per unit increases while the variable cost per unit remains constant.
One way that computing an average cost per unit facilitates management decision making is that managers are provided more timely and more relevant cost information.
Operating leverage enables a company to convert small changes in fixed costs into dramatic changes in profitability.
The contribution margin format income statement is not widely used for external financial reporting, but is allowed by GAAP.
Descriptions of cost behavior as fixed or variable pertain to a particular range of activity.
Risk refers to the possibility that sacrifices may exceed benefits.
A company with a completely fixed cost structure will have operating leverage of 1.
If a company shifts its cost structure by decreasing fixed costs and increasing variable costs, it will lower both the level of risk and its potential for profits.
Potential problems associated with cost averaging can be reduced by averaging the cost over a shorter span of time.
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