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3 years ago

Select the incorrect statement regarding the relationship between cost behavior and profits.

Business

1 answer:

givi [52]3 years ago

3 0

Answer:

C. In a pure fixed cost structure, the unit selling price and unit contribution margin are equal.

Explanation:

In Accounting, cost behavior is an indication of how costs in a firm reacts to change in activity levels. There are basically three types of cost behavior; fixed costs, variable costs and semi-variable costs.

The relationship between cost behavior and profits are;

- A pure fixed cost structure offers more security if volume expectations are not achieved.

- In a pure variable cost structure, when revenue increases by $1, so do profits.

- A pure variable cost structure offers higher potential rewards.

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cestrela7 [59]

Answer:

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2 years ago

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kaheart [24]

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2 years ago

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MrMuchimi

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