If a company faces declining sales over time,it must restructure its costs to break-even at a lower volume.In order to carry this out,what costs can be reduced?
A) variable costs only
B) fixed costs only
C) variable and fixed costs
D) step costs only

Question

Quizplus · Accepted Answer

In order to break-even at a lower volume, a company should reduce both fixed and variable costs. By reducing fixed costs, the company can decrease its overall operating expenses, while reducing variable costs can help decrease the cost of goods sold. By reducing both types of costs, the company can achieve a lower break-even point and adapt to declining sales. Step costs may not be relevant in this scenario, as they are typically costs that increase or decrease in large increments rather than gradually over time.

If a Company Faces Declining Sales Over Time,it Must Restructure