Variable Costs Are $17 Per Unit and the Sales Price

question 179

True/False

Variable costs are $17 per unit and the sales price is $20 per unit.If volume would triple as a result of decreasing the sales price to $16 per unit,the business should strongly consider decreasing the sales price to $16 per unit.

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Definitions:

Maturity Dates

The specified dates on which the principal amount of a debt instrument, such as a bond or loan, is to be repaid to the lender.

Interest-bearing Notes

A debt instrument that pays interest to the lender, including a specified interest rate and maturity date.

Long-term

Describes assets, liabilities, or financial investments that are expected to be held or have a life span greater than one year.

Contract Rate

The agreed-upon rate specified in a contract that determines the amount of interest to be accrued on financial instruments such as loans or bonds.