In a volume sensitive business, the ratio of costs is:
A) high fixed cost to total cost
B) high fixed costs to variable costs
C) high variable costs to total costs
D) high variable costs to fixed costs

Question

Quizplus · Accepted Answer

In a volume sensitive business, high fixed costs relative to total costs mean that as volume increases, the fixed costs are spread over more units, reducing the cost per unit and increasing profitability.

In a Volume Sensitive Business, the Ratio of Costs Is