FIGURE 2- 4

question 5

Multiple Choice

FIGURE 2- 4
-Suppose we have data for 1000 students for a period of one year.The data show that those students who spend more hours studying have a higher grade point average (GPA) .We can say that

• A)there is a causal relationship between hours of study time and GPA.
• B)there is a positive correlation between hours of study time and GPA.
• C)more hours spent studying leads to a higher GPA.
• D)if hours of study time increase,then GPA will automatically increase.
• E)having a higher GPA leads students to spend more time studying.

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Definitions:

Variable Cost

Costs that vary directly with the level of production or output.

Break-even Point

The level of production or sales at which total revenues equals total expenses, with no net loss or gain.

Contribution Margins

The amount remaining from sales revenue after all variable expenses have been deducted, indicating how much contributes to covering fixed costs and generating profit.

Cost-volume-profit Chart

A cost-volume-profit chart is a visual representation that shows how changes in a company's sales volume will affect its costs and profitability, facilitating breakeven and profit-target analysis.