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What else can I help you with?
Why may a firm remain in operating even if it does not cover the total cost of the production?
A firm may continue to operate even if it does not cover its total costs if it can cover its variable costs and contribute to fixed costs. This situation often occurs in the short run when a firm is trying to ride out a temporary downturn in demand. Additionally, staying in operation may help maintain market presence and customer relationships, which can be crucial for recovery. Ultimately, the firm will reevaluate its viability if losses persist in the long term.
Total product that needs to sell to cover total costs?
Long run
Too high to clear the market?
No producer can cover the costs of production at that price
Contribution margin is equal to fixed costs minus variable costs?
No... The contribution margin is the dollar amount of each unit of output that is available first to cover fixed costs and then to contribute to profit.
Why does a firm ever produce when its losing money?
A firm may continue to produce even when it's losing money to cover its variable costs and minimize losses. By operating, it can still generate some revenue, which helps offset fixed costs that must be paid regardless of production levels. Additionally, staying in the market can help maintain customer relationships and market share, positioning the firm to recover when conditions improve. Ultimately, the decision is often based on the expectation of future profitability.
What phrase describes a company whose revenues cover its operating costs?
Positive Cash Flow
What is total operating costs minus gross profit?
Total operating costs minus gross profit equals operating loss or operating income, depending on the values of each. If total operating costs exceed gross profit, the result is an operating loss, indicating that the company is not generating enough revenue to cover its operating expenses. Conversely, if gross profit exceeds total operating costs, the result is operating income, reflecting a profitable operation. This metric is crucial for assessing a company's operational efficiency and financial health.
What are establishment expenses?
These costs include the initial costs in establishing the business (e.g. rent, insurance and stock), capital costs (e.g. equipment, plant and machinery) and operating costs (the cost of operating the business until income is sufficient to cover the costs of the business).when you save the money your future will be bright...
When you adopt a pet from a local shelter do you have to pay for it?
Yes. Usually the shelter requires a fee to help cover their operating costs.
Will a firm experience a loss when its revenue is less than its expenses?
Yes, a firm will experience a loss when its revenue is less than its expenses. This occurs because the costs of operating the business exceed the income generated from sales or services. As a result, the firm is unable to cover its operational costs, leading to negative financial performance. Consistent losses can threaten the firm's viability and sustainability.
If non-traceable costs are not allocated to the various operating units within an organization who ends up paying these costs?
The organization would end up incurring the costs unless that organization has an allocated percentage within their contribution margin to cover such costs.
Cover the costs or cover the expenses?
To cover the cost
Does Allstate Insurance Company offer car repair insurance?
Depending on the coverage plan, Allstate Insurance can cover car repair costs. They can also cover rental car costs while your car is being repaired.
Should a firm continue to operate even when total revenue is not covering total cost?
Yes, if the firm is able to cover fixed costs and a portion of variable costs it should continue to operate. If it is not operating, it will still have its fixed costs but will not be able to cover it. So even if a firm is making losses, it is making less of a loss than if it were to temporarily shut down.
Can you explain how an expense ratio works in relation to investment funds?
An expense ratio is a fee charged by investment funds to cover their operating costs. It is expressed as a percentage of the fund's total assets. A lower expense ratio means less of your investment returns are being used to cover fees, which can potentially lead to higher overall returns for investors.
Does any Insurance cover the costs for a handicapped stair lift?
Health insurance will cover a portion of the purchase and installation costs, but you're on your own for maintenance costs.
What is the difference between non-profit and commercial recreation?
Non-profit is generally a public or government owned organization that offers a service to the community. Commercial recreation is generally a privately owned organization with the long-term intent of being profitable, and the money it receives must cover operating costs
