Top Posters
Since Sunday
5
o
5
4
m
4
b
4
x
4
a
4
l
4
t
4
S
4
m
3
s
3
New Topic  
dp dp
wrote...
Posts: 296
Rep: 0 0
5 years ago
Dolph and Evan started the DE Restaurant in 2015. They rented a building, bought equipment, and hired two employees to work full time at a fixed monthly salary. Utilities and other operating charges remain fairly constant during each month.

During the past two years, the business has grown with average sales increasing 1% a month. This situation pleases both Dolph and Evan, but they do not understand how sales can grow by 1% a month while profits are increasing at an even faster pace. They are afraid that one day they will wake up to increasing sales but decreasing profits.

Required:
Explain why the profits have increased at a faster rate than sales. Use the terms variable costs and fixed costs in your response.
Textbook 
Cost Accounting: A Managerial Emphasis

Cost Accounting: A Managerial Emphasis


Edition: 16th
Authors:
Read 675 times
3 Replies
Replies
Answer verified by a subject expert
jyang3jyang3
wrote...
Posts: 196
5 years ago
Sign in or Sign up in seconds to unlock everything for free
More solutions for this book are available here

Related Topics

dp Author
wrote...
5 years ago
You are really a genius. Thanks
wrote...
5 years ago
NP
New Topic      
Explore
Post your homework questions and get free online help from our incredible volunteers
  927 People Browsing
Related Images
  
 236
  
 918
  
 144
Your Opinion
Which is the best fuel for late night cramming?
Votes: 144