Reducing reliance on human workers and instead investing heavily in computers and online technology will
A) reduce fixed costs and increase variable costs.
B) reduce variable costs and increase fixed costs.
C) have no effect on the relative proportion of fixed and variable costs.
D) make the company less susceptible to economic swings.

Question

Quizplus · Accepted Answer

Investing heavily in computers and online technology will reduce the need for human workers, which will decrease variable costs such as wages, benefits, and training expenses. This will likely lead to an increase in fixed costs such as equipment, software, and maintenance expenses. Therefore, the company will see a reduction in variable costs and an increase in fixed costs.

Reducing Reliance on Human Workers and Instead Investing Heavily in Computers