5.9 Accounting in the Headlines: Breakeven

What happens to the breakeven point when Sports Illustrated lays off all six staff photographers and uses freelancers instead?

Questions

  1. What type of cost would staff photographers be for Sports Illustrated (fixed, variable, or mixed)?
  2. What type of cost would the freelance photographers be for Sports Illustrated?
  3. What is likely to happen to the breakeven point for Sports Illustrated due to the switch to using freelance photographers?
  4. What are some disadvantages to Sports Illustrated’s decision to outsource its photography?


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