The information below relates to costs, revenues, and assets anticipated in the Shoe Division of BVD Footwear Corporation: How would each of the following measures be affected if sales rise by $5,000 in the Shoe Division?

A) increase increase increase
B) increase no change increase
C) increase increase no change
D) no change no change increase

Question

The information below relates to costs, revenues, and assets anticipated in the Shoe Division of BVD Footwear Corporation:

How would each of the following measures be affected if sales rise by $5,000 in the Shoe Division?
The information below relates to costs, revenues, and assets anticipated in the Shoe Division of BVD Footwear Corporation: How would each of the following measures be affected if sales rise by $5,000 in the Shoe Division? A) increase increase increase B) increase no change increase C) increase increase no change D) no change no change increase

A) increase increase increase 
B) increase no change increase 
C) increase increase no change 
D) no change no change increase

Quizplus · Accepted Answer

If sales in the Shoe Division increase by $5,000, the following measures will be affected as follows:

- Costs: Since fixed costs will not change and variable costs will increase with the increase in sales, the total costs will increase.
- Revenues: The revenues will increase by the $5,000 increase in sales.
- Assets: Since the Shoe Division's assets will not change with the increase in sales, it remains unchanged.

Therefore, the measures that will increase are costs and revenues. The measure that will not change is assets. Therefore, the best choice is C.

The Information Below Relates to Costs, Revenues, and Assets Anticipated