If a Company Is About to Operate in an Environment

question 66

Multiple Choice

If a company is about to operate in an environment in which there will be a great deal of variability in the level of revenues, then the company

• A) should structure its cost structure to have high fixed costs and higher total variable costs.
• B) should structure its cost structure to have high fixed costs and consequently lower per unit variable costs.
• C) should structure its cost structure to have low fixed costs and consequently higher per unit variable costs.
• D) None of the above.

---

Definitions:

Technical Standards

Specifications and guidelines established by consensus among professionals that ensure the reliability, safety, and interoperability of products, services, and systems.

Government Regulations

Government regulations are legal directives issued by government bodies to control or manage activities within various industries, often for public welfare, safety, or market fairness.

Optimize

This means to make something as effective, perfect, or functional as possible, often through the use of careful analysis and strategies.

Internal Consensus

The agreement reached within an organization or group on a particular decision or issue.