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John Diaz owns Pacific Electric, a large electrical contracting firm that provides services to building construction projects. The company has 2,000 employees and operates in three western states. Recently the company experienced large losses due to a downturn in the economy and a slowdown in construction. John thinks the losses were particularly large because his company has too much fixed cost.
Required
a. Expand on John's thought. How are the large losses related to fixed costs?

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Accounting Basics, Accounting

Category:- Accounting Basics
Reference No.:- M962829

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