Question

19. What may be the causes of cost reduction by increasing production volume? (a) Spreading fixed costs over a large producti
0 0
Add a comment Improve this question Transcribed image text
Answer #1

a, b, and c

When a company increases production there are multiple things that happen. Firstly the fixed cost is spread across more volume of products. This reduces the impact of fixed cost. Next, the process of production standardizes thus each worker tends to be more specialized in their individual task. Finally, as the volume increase the learning rate of the task reduces the overall time and thus the labor cost required per unit. These are impacts of economies of scale.

Add a comment
Know the answer?
Add Answer to:
19. What may be the causes of cost reduction by increasing production volume? (a) Spreading fixed...
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Not the answer you're looking for? Ask your own homework help question. Our experts will answer your question WITHIN MINUTES for Free.
Similar Homework Help Questions
  • 1. Total costs may be computed as follows: a.(Fixed costs per unit × Unit volume) +...

    1. Total costs may be computed as follows: a.(Fixed costs per unit × Unit volume) + Variable costs per unit b.Fixed costs per unit + (Variable costs per unit × Unit volume) c.Fixed costs + (Variable costs per unit × Unit volume) 2. A coefficient of determination of 0.91 means a.that the independent variable explains 91 percent of the cost. b.the model is significant 91 percent of the time. c.the two variables move together in the same direction and have...

  • 13. As output (plant size) increases, economies of scale occur when the A) long-run average cost...

    13. As output (plant size) increases, economies of scale occur when the A) long-run average cost increases. B) long-run average cost decreases. C) short-run average total cost decreases. D) long-run average cost stays constant 14. Economies of scale can occur as a result of which of the following? A) increasing marginal costs as the firm increases its size B) higher fixed cost as the firm increases its size C) management difficulties as the firm increases its size D) greater specialization...

  • When marginal cost of production rises above the average total cost of production, we know that:...

    When marginal cost of production rises above the average total cost of production, we know that:             A.         the firm has economies of scale             B.         average total cost is decreasing             C.         marginal cost is negative             D.         average total cost is increasing Average total cost curves are usually depicted as downward sloping at low levels of output because:             A.         Average fixed costs are declining             B.         Opportunity costs decline as output (Q) increases             C.         Average fixed...

  • 19. Table 13-16 Quantity Total Cost Fixed Cost Variable Cost Marginal Cost Average Fixed Cost Average Variable Aver...

    19. Table 13-16 Quantity Total Cost Fixed Cost Variable Cost Marginal Cost Average Fixed Cost Average Variable Average Total Cost 0 $24 $16 $50 $108 Refer to Table 13-16. What is the fixed cost of producing units of output? a. $16 b. $24 C. $12 d. $0 20. Refer to Table 13-16 in Question 19. What is the total cost of producing 2 units of output? a $76 b. $74 C. $58 d. $50 21. Refer to Table 13-16 in...

  • May I have help finding the variable spending variance, fixed overhead volume variance, and fixed overhead...

    May I have help finding the variable spending variance, fixed overhead volume variance, and fixed overhead spending variance? I am confused as to what to multiply and divide by... QUESTION 1 1 points Save Answer H.D. Samuelson Inc. 2015 Production Budget Budgeted production: 5,000 units (5,000 kits @ $13.00/kit) (5,000 hrs. @ $13.00/hr.) Materials Direct Labor Fixed overhead costs Variable overhead costs $65,000 $65,000 $650,000 $700,000 Note: Both fixed and variable overhead allocation are based on labor hours H.D. Samuelson...

  • EX 19-17 Cost-volume-profit chart For the coming year, Weill Inc. anticipates fixed costs of $240,000, a...

    EX 19-17 Cost-volume-profit chart For the coming year, Weill Inc. anticipates fixed costs of $240,000, a unit variable cost of $80, and a unit selling price of $120. The maximum sales within the relevant range are $1,200,000. a. Construct a cost-volume-profit chart. b. Estimate the break-even sales (dollars) by using the cost-volume-profit chart constructed in part (a). c. What is the main advantage of presenting the cost-volume-profit analysis in graphic form rather than equation form?

  • Chapter 19 Cost-Volume-Profit Analysis 983 EX 19-8 High-low method for a service company Obj. 1 ✓ Fixed cost, Boston...

    Chapter 19 Cost-Volume-Profit Analysis 983 EX 19-8 High-low method for a service company Obj. 1 ✓ Fixed cost, Boston Railroad decided to use the high-low method and operating daca from the past six $600,000 months to estimate the fixed and variable components of t: asportation costs. The activity base used by Boston Railroad is a measure of railroad operating activity, termed "gross-ton miles," which is the total number of tons multiplied by the miles moved. Transportation Costs Gross-Ton Miles SHOW...

  • A U-shaped long-run average total cost curve can be explained by firms increasing their factory size...

    A U-shaped long-run average total cost curve can be explained by firms increasing their factory size to (x) avoid coordination problems that occur when the factory is large. (y) take advantage of greater specialization. (z) avoid fixed costs. A. (x), (y) and (z) B. (x) and (y) only C. (x) and (z) only D. (y) and (z) only E. (y) only A business firm produces and sells specialty cakes. Last year, the firm produced 12,000 cakes and sold each cake...

  • 35. PhotoMix Corporation produces three products. Cost, price, and volume data is shown below: Total Fixed...

    35. PhotoMix Corporation produces three products. Cost, price, and volume data is shown below: Total Fixed costs $2.400 Tax rate 40% Candle Holders Holders Holders Normal volume Price per unit Variable cost per unit 150 $5 $10 3 2 When using units as the measure, what proportion of the sales mix do picture holders represent? Round to the nearest whole percent. a) 33% b) 46% c) Some other percentage d) Cannot be determined Answer: b Difficulty: Easy Learning Objective: Explain...

  • A. estimate TC and ATC for the projected first year volume of 20k units. B. An...

    A. estimate TC and ATC for the projected first year volume of 20k units. B. An increase in productivity because of greater experience or learning during the course of the year resulted in substantial cost saving for the company. Estimate effect of learning on ATC of actual 2nd yr TC was $848,000 at an actual volume of 20k units. Learning Curves. Modern Merchandise, Inc., makes and markets do-it-yourself hardware, housewares, and industrial products. The company's new Aperture Miniblind is winning...

ADVERTISEMENT
Free Homework Help App
Download From Google Play
Scan Your Homework
to Get Instant Free Answers
Need Online Homework Help?
Ask a Question
Get Answers For Free
Most questions answered within 3 hours.
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT