Hello, im new member here, glad being part of the great website and great people here.

help me out with this accounting question. Im Stuck totally

Question:

If company A has mostly Fixed cost, and company B has mostly Variable cost. When sales volume increase, which company would has higher percentage increase in profit?

And im required to write an explanation for around 500 words with example using numbers.

, give me some Hints on what do I have to discuss for the answer inorder to support the conclusion which is either company A or B would has higher percentage increase in profit.

Thanks for your kindly help.

Vic

iAMfromHuntersBar

That's not a very big word count, so you'll have to be brief!

I'd want to start out by briefly explaining fixed cost;
Fixed cost - Wikipedia, the free encyclopedia

Then briefly explain variable cost;
Variable cost - Wikipedia, the free encyclopedia

Then make a conclusion as to why either company A or B would make more profit.

iAMfromHuntersBar

Oh, and welcome to the site! Good to have you on board!

J

sym7081

Thanks for the warmly welcome :-) And thanks for the help :-)