The presence of fixed production costs causes operating profit to vary more than __________ over the business cycle.

A) variable costs
B) net profit
C) total costs
D) sales revenue

Question

The presence of fixed production costs causes operating profit to vary more than __________ over the business cycle.

A) variable costs
B) net profit
C) total costs
D) sales revenue

Quizplus · Accepted Answer

The presence of fixed production costs causes operating profit to vary more than sales revenue over the business cycle.In times of recession,profits decline by a greater percentage than sales.

The Presence of Fixed Production Costs Causes Operating Profit to Vary