A plant may remain operating when sales are depressed
A) if the selling price per unit exceeds the variable cost per unit.
B) to help the local economy.
C) in an effort to cover at least some of the variable cost.
D) unless variable costs are zero when production is zero.

Question

Quizplus · Accepted Answer

If the selling price per unit exceeds the variable cost per unit, the plant can cover its variable costs and contribute to fixed costs, making it financially viable to continue operating even when sales are depressed.

A Plant May Remain Operating When Sales Are Depressed