Because a New Business Has Grown Considerably,it Can Now Purchase

question 14

Multiple Choice

Because a new business has grown considerably,it can now purchase larger quantities of a certain raw material. Purchasing in larger quantities allows the company to get a lower price per pound of the raw material. Which of the following is related to this situation?

• A) Average fixed costs will decrease.
• B) Average variable costs will decrease.
• C) This is the idea of purchasing by licensing.
• D) Average managerial capacity will increase.
• E) Cash flow will decrease.

Apply knowledge of solvency, liquidity, and credit risk in financial analysis.

Understand the use of financial statements, especially the statement of cash flows, in assessing a company's credit risk and financial health.

Understand the conceptual differences between absorption costing and variable costing.

Identify the components that make up total product costs under both costing methods.

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Definitions:

Checkpoint Gene

A gene that regulates cell cycle checkpoints to ensure cells do not divide unless certain conditions are met, playing a key role in preventing cancer.

Proto-Oncogene

Gene that, by mutation, can become an oncogene.

Malignant Neoplasm

A cancerous tumor that is invasive and can spread to other parts of the body.

Tumor Cell

A cell that has undergone mutation leading to uncontrolled growth, potentially forming a tumor.