A Cost That Changes in Proportion to Changes in Volume

question 181

Multiple Choice

A cost that changes in proportion to changes in volume of activity is a(n) :

• A) Differential cost.
• B) Fixed cost.
• C) Incremental cost.
• D) Variable cost.
• E) Product cost.

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Definitions:

Full Capacity

The maximum level of output that a company can sustain to make a product or provide a service under normal circumstances.

Natural Person

An individual human being, as opposed to a legal entity such as a corporation or government.

Judicial Lien

A legal claim or hold on a debtor's property, granted by a court judgment, to ensure the payment of a debt or obligation.

Charging Order

A legal remedy granted by a court to a creditor, allowing them to claim the debtor's interest in a partnership or limited liability company to satisfy the debt.