Higher volume leads to higher average costs

Assignment Help Financial Management
Reference no: EM13810819

Consider the following data: fixed costs = $10 million, variable cost per unit = $400, and revenue per unit = $1,200. For this organization, which of the following statements is most correct?

Higher volume leads to higher total costs.

Higher volume leads to higher average costs.

Higher volume leads to a higher variable cost per unit.

Higher volume leads to a higher contribution margin per unit.

None of the above is correct.

Reference no: EM13810819

Questions Cloud

Assume that the securities are correctly priced : You have been given the following information on two corporations; you are to assume that the securities are correctly priced. My Corp, Inc. has a Beta of 1.25 and an Expected Return of .145; Your Corp, Inc. has a Beta of .75 and an Expected Return o..
What is the expected risk premium on the portfolio : You have decided to invest 30 percent in X; 30 percent in Y; and 40 percent in Z. The probability of the state of the economy is Boom 25%; Normal 60%; and, Bust 15%. What is the portfolio expected return? If the expected T-bill rate is 1.5 percent, w..
Substantive responses will count toward participation : Substantive responses will count toward participation.  What is the problem asking for if they request you to find the "x intercept"?  How would you find the "x intercept"?  What is the problem asking for when they request you to find the 'y intercep..
Business and government relations : Discuss the main reasons why a business should or should not be involved in political discussions or take a political stand. Use terms found in Chapter 9 to demonstrate your understanding of the material.
Higher volume leads to higher average costs : Consider the following data: fixed costs = $10 million, variable cost per unit = $400, and revenue per unit = $1,200. For this organization, which of the following statements is most correct? Higher volume leads to higher total costs. Higher volume l..
How do you determine whether an ordered pair : How do you determine whether an ordered pair is a solution to a linear equation?  Can you demonstrate with the below examples?Determine whether the ordered pair is a solution to the given equation.
What actions should jason take to obtain a contractor to do : Jason is the project manager for a manufacturing company. After several weeks of planning sessions, a team member informs him that a part of the production work needs to be outsourced to another company since they don't have the relevant expertise in..
Northcentral university : Promoting individual development and working to maintain a productive and positive working environment are vital. However, these are not the only functions of HR. Write a paper in which you identify other important HR functions and analyze how you vi..
Economic run size : A shop that makes candles offers a scented candle, which has a monthly demand of 360 boxes. Candles can be produced at a rate of 36 boxes per day. The shop operates 20 days a month. Assume that demand is uniform throughout the month. Setup cost is..

Reviews

Write a Review

 

Financial Management Questions & Answers

  What are the characteristics of structured interviews

Describe the structured interview. What are the characteristics of structured interviews that improve on the shortcomings of unstructured interviews? Develop one original situational question and an accompanying rating scale using benchmark responses..

  Inventory turnover ratio and days sales in inventory

Sorenson Inc. has sales of $5,712,000, a gross profit margin of 27.45 percent, and inventory of $937,000. What are the company’s inventory turnover ratio and days’ sales in inventory?

  Explain the efficient market hypothesis

The New York Stock Exchange is an example of a stock exchange that has a physical location. e) A larger bid-ask spread means that the dealer will realize a lower profit. f) The efficient market hypothesis assumes that all inventories are rational.

  What is the yield to maturity of the bond today

A corporate bond has a face value of $1,000 and an annual coupon interest rate of 7%. Interest is paid annually. 10 years of the life of the bond remain. The current market price of the bond is $1232. To the nearest 1/100 0f 1 percent, what is the yi..

  Initial cost probability net revenue probability

A project has a life of 10 years, and no salvage value. The firm uses an interest rate of 12% to evaluate projects. This project has an uncertain initial cost and net revenue as below. A. Joint probability distribution for cost and net revenue B.

  What are fixed costs

At an output level of 17,000 units, you have calculated that the degree of operating leverage is 2.00. The operating cash flow is $33,800 in this case. What are fixed costs? What will the operating cash flow be if output rises to 18,000 units?

  Transactions in a mutual fund

Abe made the following transactions in a mutual fund: The fund paid a dividend of $2 per share

  Calculate the aud-jpy cross rate

What statement about spot and forward exchange rates is correct and calculate the AUD/JPY cross rate when the following FX spot rates are quoted

  What is the total annual holding cost

For SKU A3510 at the Hardware Warehouse, the order quantity has been set at 150 units each time an order is placed. The daily demand is normally distributed, with a mean of 12 units and a standard deviation of 4. It always takes exactly 5 days for an..

  Financial markets seeking mispriced securities

Individuals that continually monitor the financial markets seeking mispriced securities:

  Which of the statements below is

1 which of the statements below is false?a the purpose of studying financial statements is to understand those portions

  Corporate federal income tax rates

The payback method fails to consider. Why is our reserve banking system an independent federal agency? Why do many people believe we should not have a independent reserve system? Corporate federal income tax rates. Preferred stock and bonds are simil..

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd