A Cost Structure Which Relies More Heavily on Fixed Costs

question 28

Multiple Choice

A cost structure which relies more heavily on fixed costs makes the company

• A) more sensitive to changes in sales revenue.
• B) less sensitive to changes in sales revenue.
• C) either more or less sensitive to changes in sales revenue, depending on other factors.
• D) have a lower break-even point.

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Definitions:

Beef

A type of meat obtained from cattle.

Pork

Pork refers to the culinary name for meat derived from domestic pigs, used in various dishes worldwide.

Pounds

A unit of weight measurement in the British imperial and US customary systems, equal to 16 ounces.

Steel Washers

Thin plates with holes that are normally used to distribute the load of a threaded fastener, such as a screw or nut.