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1/ Economies of scale can be achieved by using facilities more intensively. True or False 2/...

1/ Economies of scale can be achieved by using facilities more intensively.

True or False

2/

A fixed cost may include all of the following except:

  • Depreciation.

  • Sales commission expense.

  • Rent for the warehouse.

  • Annual salary of the CEO.

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Answer #1

1) Economies of scale can be achieved by using facilities more intensively.

An: True

Economies of scale is the cost advantage that enterprises obtain due to output produced.these are the benefit gained by individual firm by increasing its size

2)A Fixed cost may include all of the following except

An:

  • Depreciation
  • Rent for the ware house
  • Annual salary of the CEO

here sales commission is excluded because it is a variable cost.fixed cost are cost that do not change in total as the production changes.with in a relevant range of production total fixed cost will unchanged.but fixed cost per unit will decrease as the level of production increase.

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