Because Managers Want Stable Unit Cost Figures,the Accountant Creates an Artificial

question 27

True/False

Because managers want stable unit cost figures,the accountant creates an artificial stability so far as fixed costs are concerned by applying fixed costs to products as if the fixed costs were really variable.

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Definitions:

Inelastic Demand

A situation where the demand for a product does not change significantly with a change in price.

Marginal Revenue

The rise in income achieved by selling an extra unit of a product or service.

Price Searcher

A seller that determines the selling price of its product or service based on market conditions, demand, and competition, instead of adhering to a market dictated price.

Marginal Revenue

The additional revenue that a company receives from selling one more unit of a good or service.