P company is a labor intensive company and on the contrary, Q company is heavily capital-intensive company.'Which of the following statement is true to above case?P company will have higher contribution margin per unit.Q company will have higher contribution margin per unit.P company will have higher break-even point.Q company will have higher break-even point.

Labor-intensive means that P company needs/requires large amount of labor to operate/produce goods…

Answered: P company is a labor intensive company…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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11. A primary objective in measuring productivity is to improve operations either by using fewer inputs to produce the same output, or to produce: a. More quickly. b. With fewer constraints. c. More outputs with the same inputs. d. More outputs with more inputs. 12. Which one of the following refers to the firm's ability to pay its current operating expenses and maturing debt? a. Discounted cash flow. b. Liquidity. c. Profitability.S d. Purchasing power.
A high operating margin implies that ______________ . The company is in a better position to increase its finance cost The company is in a better position to absorb the finance cost The company is in a better position to reduce its overheads The company is in a better position to increase its prices
All else being equal, a company like Wally World Theme Park which has a high operating leverage, will have relatively high variable costs. relatively high contribution margin ratio. relatively low fixed costs. relatively low risk.
10..
you are the owner of a firm, and your firm is experiencing "economies of scale" in production. If this is the case, will the average total cost increase, decrease or remain unchanged as you increase the level of output?
The lower the MARR (minimum attractive rate of return), the higher the price that a company should be willing to pay for equipment that reduces annual operating expenses. A) True (B) False
In general, a firm with low operating leverage also has a small proportion of its total costs in the form of variable costs. T/F True False
Discuss possible strategies of the company to decrease breakeven point, Contribution margin, and increase profitability without increasing the selling price per unit.
A firm can reduce its breakeven volume by: decreasing fixed costs. B) decreasing contribution margin. Jy C increasing variable costs. lowering selling price.
Consider the following statements: 1. Businesses that are capital intensive tend to have high operating gearing. 2. Businesses with relatively high total variable cost compared with their total fixed cost, at their normal level of activity, are said to have high operating gearing. Are the above statements true or false?
Which of the following statements about operating leverage is NOT true? Group of answer choices Operating leverage predicts the effect of fixed costs on operating income when sales volume changes. A higher proportion of fixed cost in a cost structure results in higher operating leverage. The higher the operating leverage, the higher the risk of loss when sales volume decreases. A higher proportion of fixed cost in a cost structure results in lower operating leverage.
Compared to companies that have a cost structure that is mainly comprised of fixed costs, companies with a cost structure that is mainly comprised of variable costs would: O a. Be vulnerable to adverse effects of economic downturn O b. Have low operating leverage Oc. Be able to enhance their profits at a higher degree on O d. Be considered more risky

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