Spreading Fixed Costs Over a Large Volume Results in a Cost-Savings

question 36

Multiple Choice

Spreading fixed costs over a large volume results in a cost-savings phenomenon referred to as:

• A)volume synergies.
• B)economies of scale.
• C)captured savings.
• D)size effects.
• E)location economies.

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Definitions:

Estimates

Approximations or educated guesses used in accounting to quantify amounts when precise measurements are unavailable or impractical.

Managerial Accounting

Managerial accounting involves the provision of financial information to management for decision-making, planning, and control purposes.

Financial Accounting

The field of accounting focused on the summarization, analysis, and reporting of financial transactions pertaining to a business.

External Users

Individuals or entities outside a company who use its financial information, such as investors, creditors, and regulatory bodies.