When Projecting Operating Expenses,it Is Important to Determine the Mix

question 3

Multiple Choice

When projecting operating expenses,it is important to determine the mix of fixed and variable costs; one clue suggesting the presence of fixed costs is:

• A) the percentage change in cost of goods sold in prior years is significantly greater than the percentage change in sales.
• B) the percentage change in cost of goods sold in prior years is significantly less than the percentage change in sales.
• C) low capital intensity in the production process.
• D) the percentage change in sales in prior years is significantly greater than the percentage change in receivables.

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Definitions:

Employee Understanding

The extent to which employees comprehend their job roles, organizational objectives, and the expectations placed upon them.

Direct Contact

Interaction between individuals or entities without intermediaries, allowing for immediate communication or transfer of substances or forces.

Focused Strategy

A business approach where a firm chooses to target a specific market niche, concentrating its resources on serving that segment to the exclusion of others.

Product Design

The process of creating a new product to be sold to customers, considering its form, function, and usability.