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

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

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

Answer

Brief Explanations:

  1. Managers commonly classify operating expenses as fixed (constant regardless of production/sales volume) or variable (change with volume). So the first statement is true.
  2. Higher operating - expenses compared to competitors usually mean less efficiency in generating sales as more cost is needed to produce the same amount of sales. So the second statement is false.
  3. Operating expenses are related to day - to - day operational activities, not investing (buying/selling long - term assets) or financing (raising capital, paying debt) activities. So the third statement is true.

Answer:

  1. True
  2. False
  3. True