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How does cost-volume-profit model accommodate nonlinear costs and revenues?
Wiki User
∙ 11y ago
non-linear costs and revenues are ignored by the model
Wiki User
∙ 11y ago
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The costs of goods and services used in the process of earning revenues are called?
A business or company has expenses. Expenses include the costs of goods and services that are used in the process of earning revenues.
What accurately explains how profit is calculated?
Costs are subtracted from revenues.
When a firm's revenues rise more quickly than its costs?
Hopefully, the firm makes a profit.
In a free-market system the profit motive motivates producers to do?
Minimize costs and maximize revenues.
What role does profit motive play in the free-market system?
Minimize costs and maximize revenues.
Profit is calculated by subtracting costs from?
Profit is calculated by subtracting operating costs from gross revenues.
What is the inventory method that assigns the most recent costs to revenues?
Lifo (Last in first out) is the method which assigns the most recent costs to revenues.
The costs of goods and services used in the process of earning revenues are called?
A business or company has expenses. Expenses include the costs of goods and services that are used in the process of earning revenues.
What are revenues minus costs?
Revenue - Cost = Gross profit
What do you call when total revenues equal total costs?
Breakeven.
What accurately explains how profit is calculated?
Costs are subtracted from revenues.
For a firm to operate in the shortrun the total revenue must at least be equal to Why?
A firm would still operate if revenues are below total coots, but not if revenues are below variable costs. The reason is that as long as revenues are above variable costs, the firm will earn a difference to contribute to the fixed costs (fixed costs are costs that a company has to pay in the short-run whether it operates or not). If the firm stops operating in the short-run, it will have to pay for the full fixed costs (e.g., rent, some fixed labour) If revenues are below variable costs, for every unit of production, the company loses the difference and does not contribute to the fixed costs. It is more economical to shutdown in the short-run.
Why is motive considered an incentive in a market system?
Minimize costs and maximize revenues.
What is a responsibility center that incurs costs and expenses and generates revenues?
It is a Profit Center
What is a typical percent of labor costs to gross revenues for the average business?
42
What is the formula for finding the profit in math?
Profits = total revenues minus total costs.
What is defined as the absolute monetary difference between sales revenues and operating costs?
Profit
