If Two Companies Have the Same Total Sales and Total

question 119

True/False

If two companies have the same total sales and total expenses and make the same product, the volatility of net income with changes in sales will tend to be greater in the company with a higher proportion of fixed expenses in its cost structure.

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Definitions:

Range

A measure of variability. The difference between the highest score and the lowest score.

Nominal Scale

A classification system that categorizes data into discrete categories without any numeric or ordered value.

Central Tendency

A statistical measure that identifies a single value as representative of a data set, like the mean, median, or mode.

Measure

A tool or method used to quantify the characteristics or properties of subjects under investigation.