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Increase. Product cost is a reflection of the cost to manufacture and ship the product, as well as middleman markups.

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In computing the cost of merchandise sold does freight increase or decrease the cost?

Freight costs are added to the cost of the merchandise. The total is typically referred to as the "landed" cost of the product.


Freight costs incurred by a seller on merchandise sold to customers will cause an increase in what?

selling price


A decrease in input costs to firms in a market will result in?

a decrease in equilibrium price and an increase in equilibrium quantity


Do variable costs per unit decrease when sales increase?

Variable cost per unit remains same per unit and has no impact on increase or decrease of sales.


What happens to the contribution ratio when the components change?

The contribution ratio is the relationship between total sales revenue and total variable costs. If the components change, such as an increase in sales revenue or a decrease in variable costs, the contribution ratio will increase. Conversely, if sales revenue decreases or variable costs increase, the contribution ratio will decrease.


What are the Types of Returns to scale?

Economies of scale (costs decrease), diseconomies of scale (costs increase), constant returns to scale (costs stay the same)


How can manager decrease variable costs while increaseing fixed cost?

This is generally done in areas such as manufacturing where processes can be more automated. By investing in machines and facilities, the fixed costs will increase, but variable labor costs will decrease.


What causes the break even point to increase or decrease?

The break-even point increases when fixed costs increase or selling price decreases. It decreases when fixed costs decrease or selling price increases. Changes in variable costs or sales volume can also impact the break-even point.


Which term indicates that merchandise is free of transportation charges to the buyer?

"Free on Board (FOB) destination" indicates that merchandise is free of transportation charges to the buyer. This means that the seller is responsible for the shipping costs and risk of loss until the goods reach the buyer's specified location.


What are the important differences between fixed cost and variable costs?

Fixed costs are costs that do not change in total as the number of units increase or decrease. Examples include rent and utilities expense, manager salaries, etc. However, since the total cost does not change, the individual unit cost does change as units increase or decrease. Variable costs are costs that change in total as the number of units increase or decrease. An example might be direct labor, which increases based on number of hours work. However, total unit cost does not change.


What is objectives of the firm?

Succeed 1. Increase sales 2. Decrease costs 3. Operate efficiently 4. Increase profit


What oil tycoon used horizontal integration to decrease costs and increase profits?

John D. Rockefeller