managers classify operating expenses as either fixed or variable. if a company has higher operating expenses…

managers classify operating expenses as either fixed or variable. if a company has higher operating expenses compared to its competitors, that indicates they are more efficient at generating sales. operating expenses reflect the operational activities, not the investing or financing activities of a company. true false

managers classify operating expenses as either fixed or variable. if a company has higher operating expenses compared to its competitors, that indicates they are more efficient at generating sales. operating expenses reflect the operational activities, not the investing or financing activities of a company. true false

Answer

Brief Explanations:

  1. In cost - accounting, managers commonly classify operating expenses as fixed or variable. Fixed expenses remain constant in total over a relevant range, while variable expenses change in proportion to the level of activity.
  2. Higher operating expenses compared to competitors usually mean less efficiency in generating sales as it implies more cost is needed to produce the same amount of revenue.
  3. Operating expenses are related to the day - to - day operations of a business, distinct from investing (related to long - term asset purchases) and financing (related to raising capital) activities.

Answer:

  1. True
  2. False
  3. True