All categories

3 years ago

Would a firm with low degree of operating leverage need to sell more units of products to reach break-even point or less? Why?

Business

1 answer:

Leokris [45]3 years ago

6 0

Answer:

The company would need to sell less units of product.

Explanation:

Operating leverage measures the relationship between variable and fixed costs. Those companies with low operating leverage have a larger proportion of variable costs in its total costs structure and need to sell smaller amount of units in order to cover its fixed costs. Since breaking point is the point were profit is equal to zero and where sales income is equal to the total costs, consisting of both fixed and variable costs, it needs to sell less products, as its variable costs increase with the number of units sold.

You might be interested in

Modern Internet services help businesses provide timely customer service and resolve customer issues immediately. Which Internet

lesya [120]

Answer:

SMS(Short Message Service)

Explanation:

This is a system that allows for this.

5 0

3 years ago

Read 2 more answers

Because budgeted fixed costs remain the same regardless of production volume, a(n):________ variance occurs when there is a diff

blsea [12.9K]

Answer:

A production volume variance

Explanation:

A production volume variance occurs when there is a significant difference between the actual volume of products manufactured and the budgeted or standard volume of production. Therefore, a production volume variance can be harnessed by businesses in order to measure the production cost of products against the budgeted fixed cost.

The production volume variance can be calculated by difference between actual volume of production and the standard volume of production, multiplied by the overhead rate that have been budgeted.

So, when calculating the production volume variance, if the actual volume of production is lower than the budgeted or standard volume of production, then the production volume variance is not favorable.

7 0

3 years ago

A country’s real gdp rose from 500 to 550 while its nominal gdp rose from 600 to 770. what was this country’s inflation rate?

Gennadij [26K]

<span>The inflation rate is 16.67%. To find this, we first need to compute the GDP deflator for each year and then we need to calculate the percent change in the GDP deflator. The GDP deflator is given by GDPdef=(nominal GDP/Real GDP)*100. For the first year, the GDP deflator is 120. For the second year it is 140. Percent change is given by [(new value - old value)/old value]*100. Plugging in 140 for the new value and and 120 for the old value, we see get that the percent change is 16.6667. Thus the inflation rate is approximately 16.67%.</span>

5 0

3 years ago

If Project Repat were to acquire another firm that makes or sells similar products in similar markets, it would be an example of

SVEN [57.7K]

Answer:

b. Horizontal merger.

Explanation:

Project Repat is merging with a company that produces similar products to its own markets them in similar markets as well, this is an example of a horizontal merger that results in increased synergies between the similar firms and a greater market share opportunity.

Vertical mergers are usually not in the same industry. They would either be with the suppliers of Project Repat or customers who retail Project Repat's products.

Conglomerate is an example of diversification and usually the merging firms have different operations.

There are no information of clashes of any sort within the two merging companies so it is uncertain whether this is a hostile takeover.

Hope that helps.

3 0

3 years ago

you are working on creating a business document with two other co-workers . based on just this information,which of the followin

Artyom0805 [142]

Answer:

scooby doo????

Explanation:

3 0

2 years ago

Read 2 more answers