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Managerial Accounting

Managerial Accounting

 The CEO of Pride Company was presented with a graph that depicted the company’s utility cost as semi-variable. The CEO commented that the fixed-cost component does not look right to him. He proceeded by saying, “if the company shut down the plant for six months, the company would not incur half of these costs.” As a cost accountant, do you agree with the CEO’s comment? Explain your answer (300 words).