If a Company Shifts Its Cost Structure by Decreasing Fixed

question 108

True/False

If a company shifts its cost structure by decreasing fixed costs and increasing variable costs,it will lower both the level of risk and its potential for profits.

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Definitions:

Balanced Scorecard

A strategic planning and management system used to align business activities to the vision and strategy of the organization, improve internal and external communications, and monitor performance against strategic goals.

Inventory

The total amount of goods and materials held by a company for the purpose of resale or production.

On Hand

Refers to the amount of inventory currently available or in stock in a business for use or sale.

Indirect Materials

Materials used in the production process that are not directly traceable to the product, often included as part of overhead costs.