As the Level of Activity Increases

question 55

Multiple Choice

As the level of activity increases:

• A)fixed cost per unit increases.
• B)variable cost per unit increases.
• C)variable cost per unit decreases.
• D)fixed cost per unit decreases.

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Definitions:

Organizational Meeting

An organizational meeting is the initial meeting held by the incorporators or initial directors of a corporation to complete the formation of the business and to adopt bylaws.

Corporate Veil

A legal concept that separates the identity of a corporation from its shareholders, protecting them from being personally liable for the company’s debts and obligations.

Closely Held Corporations

Companies whose shares are owned by a small group of individuals or families, often with restricted stock sales.

Parent-subsidiary Relationships

The connection between a parent company that controls another company (subsidiary) through ownership of a majority of voting stock or influence.