If a company reduces its fixed costs,the operating income will increase by the same amount as the cost reduction.

Name: If a company reduces its fixed costs,the operating income will increase by the same amount as the cost reduction.
Brand: Quizplus
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Question

Quizplus · Accepted Answer

Fixed costs are costs that do not vary with changes in production or sales, such as rent or salaries. Therefore, reducing fixed costs will directly increase operating income by the same amount because there are no variable costs or additional expenses to consider.

If a Company Reduces Its Fixed Costs,the Operating Income Will