A-AS Level (CIE) Business Studies Paper-1: Specimen Questions with Answers 11 - 12 of 50

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Question 11

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Essay▾

Differentiate between fixed cost and variable cost.

Explanation

Differentiate between Fixed Cost and Variable Cost
S. No.Fixed CostVariable Cost
1Fixed cost is the cost which are not output dependentVariable cost is those cost which are output dependent
2Fixed cost is fixed till certain level of outputThere is positive correlation between the production output and the variable cost
3Fixed cost per unit changes with outputVariable cost per unit remains constant
4These costs are found only in the short periodThese costs are seen in short and long period

Question 12

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Short Answer▾

Explain the importance of measures of central tendency

Explanation

Averages occupy an important place in statistics. It represents a large group in such a way that mind can grasp simply and quickly. They are the bases of many other techniques of statistical analysis. This is the reason for Dr. Bowley defining statistics “as the science of average” . Averages are widely used than any other statistical measure because of their applications and functions. Importance of averages in statistical analysis is obvious in the words of Prof. R. A. Fisher, “The inherent inability of the human mind to grasp in its entirety a large body of numerical data compels us to seek relatively few constants that will adequately describe the data.” According to Dr. Bowley, “By the use of averages complex groups and large numbers are presented in a few significant words of figures.”

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