ECONOMICS

COST ACCOUNTING

BREAK EVEN POINT

Question [CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
All of the following are examples of diseconomies of scale as a business grows except:
A
poor communication as there are so many people to send messages to
B
low workforce motivation as they feel less involved in a larger business
C
problems with decision making when there are many different divisions of a business
D
technological problems with new equipment causing production to stop
Explanation: 

Detailed explanation-1: -For example, if a product is made up of two components, gadget A and gadget B, diseconomies of scale might occur if gadget B is produced at a slower rate than gadget A. This forces the company to slow the production rate of gadget A, increasing its per-unit cost.

Detailed explanation-2: -Late delivery due to congestion in the busy departments is not a cause of internal diseconomies of scale. Internal diseconomies of scale are the basic economy that occurs due to internal difficulties within the organization. They are the factors that raise the cost of production of an organization.

Detailed explanation-3: -Diseconomies of scale is an economic situation that a business might experience when it begins to expand. The expansion of a business or company, whether in size or output hat creates an increase in the cost per unit of items produces is known as diseconomies of scale.

There is 1 question to complete.