True. Variable costing treats fixed overhead cost as a period cost.
A variable cost changes with the number of units that are put out.
Overhead cost (which is ongoing) refers to what it takes to run the business or product the product.
A period cost refers to a cost that is linked over time for a transaction, not constant.
Answer: They are both right.
Explanation:
Firms in every market will always maximise profit where their Marginal Revenue equals Marginal Cost because at this point, resources are being fully utilized. This is therefore no different in a Perfectly competitive market so Skip is correct.
Peggy is also correct however because in a Perfectly Competitive market, the demand curve is perfectly elastic. This creates a situation where the Price, Marginal Revenue and Average Revenue are all the same and represent the demand curve as well.
With the Price being the same as the Marginal Revenue in a Perfectly competitive firm, that means that where the Price equals Marginal Cost is where the Marginal Revenue equals Marginal Cost as well so indeed perfectly competitive firms maximize profit where price equals marginal cost.
Answer:
D. are incurred even if nothing is produced.
Explanation:
There are primarily two types of costs, i.e. the variable cost and the fixed cost. The variable cost is the cost that varies when the level of production changes, while the fixed cost is the cost that remains unchanged whether the level of production changes or not
So, by the above explanation, we can conclude that the fixed cost can be incurred if there is nothing to be produced.
Answer:
The correct answer to the following question is option D) Excess return.
Explanation:
The rate of return can be defined as the gain or loss( net) that a company or business gets on the investment over a defined period of time. Where for taking out the rate of return , the formula which can be used is -
Current value - Initial value / Initial value x 100
The rate of return helps in evaluating what is the investment growth rate of a company on a year to year basis and what are changes in revenues that have occurred.
When two security's have similar risk and if one security has higher return than other , then the difference between them would be called excess return.
