As Additional Equipment Is Purchased, the Level of Fixed Costs

question 135

Multiple Choice

As additional equipment is purchased, the level of fixed costs tends to _____ and the degree of operating leverage tends to _____

• A) Remain constant; remain constant.
• B) Rise; rise.
• C) Rise; fall.
• D) Fall; rise.
• E) Fall; fall.

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Definitions:

Premises

Buildings and land owned or occupied by a person or organization.

Formal operational thinking

A stage in Jean Piaget's theory of cognitive development, starting around age 12, where individuals gain the ability to think abstractly and logically.

Concrete operational thinking

A stage in cognitive development where children gain the ability to think logically about concrete events.

Systematically solve problems

Employing a methodical and organized approach to identifying solutions to issues.