COST ACCOUNTING
BREAK EVEN POINT
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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All the following are likely causes of diseconomies of scale except
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weak coordination between departments
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obtaining a large loan at a preferential interest rate
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low motivation levels of workers
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long chains of communications
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Explanation:
Detailed explanation-1: -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-2: -Diseconomies of scale typically happen when the production process becomes less efficient, leading to a higher cost for producing additional units of output. Since diseconomies of scale lead to higher marginal costs, they typically also lead to a company experiencing reduced profitability.
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