Fixed costs are the cost which remains constant in totality at each level of activity. It do not change with the change in output level. It is an unavoidable cost. Variable cost is the cost which changes in direct proportion to changes in level of activity. It remains constant per unit of output and increase at same rate as increase in output level. It is an avoidable cost. To determine: In the question, we have given the data of two similar companies related to sales, fixed and variable cost and profitability. If sales will double then we have to calculate that which company’s profitability will increase.

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Answer 1

Question

Chapter 21, Problem 17DQ

To determine

Fixed costs are the cost which remains constant in totality at each level of activity. It do not change with the change in output level. It is an unavoidable cost.

Variable cost is the cost which changes in direct proportion to changes in level of activity. It remains constant per unit of output and increase at same rate as increase in output level. It is an avoidable cost.

To determine:

In the question, we have given the data of two similar companies related to sales, fixed and variable cost and profitability. If sales will double then we have to calculate that which company’s profitability will increase.

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Answer 2

Question

Chapter 21, Problem 17DQ

To determine

Fixed costs are the cost which remains constant in totality at each level of activity. It do not change with the change in output level. It is an unavoidable cost.

Variable cost is the cost which changes in direct proportion to changes in level of activity. It remains constant per unit of output and increase at same rate as increase in output level. It is an avoidable cost.

To determine:

In the question, we have given the data of two similar companies related to sales, fixed and variable cost and profitability. If sales will double then we have to calculate that which company’s profitability will increase.

Expert Solution & Answer

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See solution

Answer 3

Question

Chapter 21, Problem 17DQ

To determine

Fixed costs are the cost which remains constant in totality at each level of activity. It do not change with the change in output level. It is an unavoidable cost.

Variable cost is the cost which changes in direct proportion to changes in level of activity. It remains constant per unit of output and increase at same rate as increase in output level. It is an avoidable cost.

To determine:

In the question, we have given the data of two similar companies related to sales, fixed and variable cost and profitability. If sales will double then we have to calculate that which company’s profitability will increase.

Expert Solution & Answer

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Answer 4

Question

Chapter 21, Problem 17DQ

To determine

Fixed costs are the cost which remains constant in totality at each level of activity. It do not change with the change in output level. It is an unavoidable cost.

Variable cost is the cost which changes in direct proportion to changes in level of activity. It remains constant per unit of output and increase at same rate as increase in output level. It is an avoidable cost.

To determine:

In the question, we have given the data of two similar companies related to sales, fixed and variable cost and profitability. If sales will double then we have to calculate that which company’s profitability will increase.

Expert Solution & Answer

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Check out a sample textbook solution

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Answer 5

Chapter 21, Problem 17DQ

To determine

Fixed costs are the cost which remains constant in totality at each level of activity. It do not change with the change in output level. It is an unavoidable cost.

Variable cost is the cost which changes in direct proportion to changes in level of activity. It remains constant per unit of output and increase at same rate as increase in output level. It is an avoidable cost.

To determine:

In the question, we have given the data of two similar companies related to sales, fixed and variable cost and profitability. If sales will double then we have to calculate that which company’s profitability will increase.

Answer 6

Chapter 21, Problem 17DQ

To determine

Fixed costs are the cost which remains constant in totality at each level of activity. It do not change with the change in output level. It is an unavoidable cost.

Variable cost is the cost which changes in direct proportion to changes in level of activity. It remains constant per unit of output and increase at same rate as increase in output level. It is an avoidable cost.

To determine:

In the question, we have given the data of two similar companies related to sales, fixed and variable cost and profitability. If sales will double then we have to calculate that which company’s profitability will increase.

Answer 7

Chapter 21, Problem 17DQ

To determine

Fixed costs are the cost which remains constant in totality at each level of activity. It do not change with the change in output level. It is an unavoidable cost.

Variable cost is the cost which changes in direct proportion to changes in level of activity. It remains constant per unit of output and increase at same rate as increase in output level. It is an avoidable cost.

To determine:

In the question, we have given the data of two similar companies related to sales, fixed and variable cost and profitability. If sales will double then we have to calculate that which company’s profitability will increase.

Answer 8

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Answer 9

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Answer 10

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Answer 11

Ch. 21 - Prob. 1DQ Ch. 21 - Prob. 2DQ Ch. 21 - When output volume increases, do fixed costs per...Ch. 21 - Prob. 4DQ Ch. 21 - Prob. 5DQ Ch. 21 - Describe the contribution margin ratio in...Ch. 21 - Prob. 7DQ Ch. 21 - Prob. 8DQ Ch. 21 - Prob. 9DQ Ch. 21 - Prob. 10DQ

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Chapter 21 Solutions