When a Greater Proportion of Costs Are Fixed Costs,then

question 127

Multiple Choice

When a greater proportion of costs are fixed costs,then:

• A)when demand is high the break-even point is increased.
• B)a decrease in sales reduces the cost per unit.
• C)a small increase in sales results in a small decrease in operating profit.
• D)when demand is low the risk of loss is high.

Understand the concept of attributions and how they are used to explain behavior.

Differentiate between dispositional (personal) and situational attributions.

Recognize the fundamental attribution error and its effects on perception.

Identify factors that influence attribution, including perspective and cultural background.

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Definitions:

Common Stock

A form of corporate equity ownership, a type of security that signifies an ownership interest in a corporation and a claim on a portion of its profits.

Installation Costs

Expenses associated with setting up or installing equipment, machinery, or infrastructure necessary for the operations or activities of a business.

Depreciation Process

The systematic reduction in the recorded cost of a fixed asset over its useful life, reflecting its decrease in value over time.

Matching Principle

An accounting principle that dictates expenses should be recognized in the same period as the revenues they help to generate.