Southwest Log Kits Makes Kits for Pool Cabanas

question 53

Multiple Choice

Southwest Log Kits makes kits for pool cabanas. Currently, the company does not advertise and has a low selling price for its kits compared to competitors. Next year, the company plans to increase the selling price and begin a wide advertising campaign. Which of the following statements is true?

• A) Southwest's breakeven point will be lower next year
• B) Southwest's operating leverage will be higher next year if the same number of units is sold
• C) Southwest's profits will be higher next year
• D) Southwest's margin of safety will be lower next year

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Definitions:

Web-Based Magazines

Web-Based Magazines are digital publications available on the internet, offering articles, news, and other content similar to traditional print magazines, but accessible online.

E-Zines

Electronic magazines published on the internet that cater to a variety of interests and topics.

Open-Design Offices

A modern office layout that eliminates most enclosed spaces like cubicles and private rooms to encourage collaboration, communication, and flexibility among employees.

Informal Communication

The exchange of information and messages that occurs outside of the formal organizational structures and channels.