Andrew's New Smartphone Works Well in Fringe Areas

question 6

Multiple Choice

Andrew's new smartphone works well in fringe areas. Therefore, probably Madison's new smartphone, which is the same make and model as Andrew's, with the same service provider, works well in fringe areas, too.

• A) No fallacy.
• B) Slippery slope.
• C) False cause.
• D) Appeal to unqualified authority.
• E) Weak analogy.

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Definitions:

Fixed Costs

Overheads that are unaffected by the quantity of output or sales, for example, tenancy costs, wages for staff, and indemnity expenses.

Contribution Format

A type of income statement presentation that separates fixed and variable costs, allowing for an easier assessment of how changes in volume affect profitability.

Contribution Format

A way of presenting income statements where variable costs are deducted from sales to find the contribution margin, then fixed costs are deducted to find net operating income.

Break-even Point

The level of production or sales at which total revenues equal total expenses, resulting in neither profit nor loss.