1Cost structure Select one a refers to the relative proporti

1.Cost structure Select one: a. refers to the relative proportion of fixed versus variable costs that a company incurs. b. generally has little impact on profitability c. cannot be significantly changed by companies d. refers to the relative proportion of operating versus nonoperating costs that a company incurs.

2.

Reducing reliance on human workers and instead investing heavily in computers and online technology will

Select one:

a. reduce fixed costs and increase variable costs

b. reduce variable costs and increase fixed costs

c. have no effect on the relative proportion of fixed and variable costs

d. make the company less susceptible to economic swings

3.

In general, when a company replaces their wage-earning employees with machines, the company\'s after-tax profits will:

Select one:

a. Increase at a slower rate as sales in units increases

b. Increase at a faster rate as sales in units increases

c. Remain constant as sales in units increases

d. Decrease as sales in units increases

Solution

Q1. Answer is a. Refers to the relative proportion of fixed versus variable cost that a company incurs. Q2. Answer is b. Reduces variable cost and increases fixed cost. Q3. Answer is b. Increase at a faster rate as sales in units increases. Due to inclusion of more of fixed cost and elimination of variable cost, operating leverage applies.