Question

The BRC Company is considering the introduction of a new line of high end electronics. Because there is considerable uncertainty with regard to the demand for the products, the company would probably be served better by a variable cost structure

Answer 1

The given statement is correct.

Step-by-step explanation:

As the uncertainty is high, thus the number of goods sold can vary. In this context it is viable to use the variable cost structure thus the overall cost is associated with the number of goods sold.

If the variable cost structure is not adopted, that can result in higher losses as the fixed cost will always be required irrespective of the number of sale made.