Which of the Following Is Most Likely to Be a Variable

question 135

Multiple Choice

Which of the following is most likely to be a variable cost for a firm?

• A) the interest payments made on loans
• B) the franchiser's fee that a restaurant must pay to the national restaurant chain
• C) the monthly rent on office space that it leased for a year
• D) the payroll taxes that are paid on employee wages

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Definitions:

Operating Cycle

The time period between the acquisition of goods for sale and the receipt of cash from customers, measuring the efficiency of a company's operational processes.

Inventory Purchases

Transactions involved in buying goods and materials to be sold or used in the production process by a business.

Collection of Cash

Collection of cash involves the process of receiving cash payments from customers or clients, typically recorded as an increase in cash or cash equivalents on the balance sheet.

Accrual Basis Accounting

Revenues are recognized when goods and services are provided to customers, and expenses are recognized in the same period as the revenues to which they relate, regardless of when cash is received or paid.