If a Company Has Only Variable Costs and Its Sales

question 85

True/False

If a company has only variable costs and its sales revenue increases by 20%, its profit will increase by an amount larger than 20%.

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Definitions:

Co-own

To have joint ownership or share ownership rights of a property, asset, or entity with one or more individuals or entities.

Corporation

A legal entity that is separate from its owners, who share limited liability protection, and is recognized by law as having rights and responsibilities.

Profit

The right to go onto someone’s land and take part of the land or a product of it away from the land.

S Corporation

A special designation granted by the IRS to small businesses that allows them to pass corporate income, credits, and deductions through to shareholders, avoiding double taxation.