Professor Elam

Here is what I preach about chapter 5-6 in Garrison cost accounting

Anybody who ever took microeconomics can understand the attraction of the strategy used by Detroit. In the short run, it makes sense to sell a car for any price greater than the added cost of producing that extra car. But if prices are so low that fixed costs are not being covered, then the company goes farther and farther into debt, until the lenders finally realize what is happening and turn off the spigot.

That quote came from this article on how the govt is running the car companies. 

Good observations, if one falls below fixed costs, they must be cut to stay in business.