A Shift from Low-Margin Sales to High-Margin Sales

question 43

Multiple Choice

A shift from low-margin sales to high-margin sales

• A) may increase net income, even though there is a decline in total units sold.
• B) will always increase net income.
• C) will always decrease net income.
• D) will always decrease units sold.

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Definitions:

Budgeting Purposes

The process of creating a plan to spend your money, outlining an organization's financial and operational goals.

Fixed Cost

Costs that do not change with the level of output produced, such as rent, salaries, and insurance.

Variable Cost

A cost that changes in proportion to the level of activity or volume of output.

Wages And Salaries

Compensation paid to employees for their labor, with wages typically being hourly rates and salaries being fixed annual amounts.