A Factory Is Planning to Open in a Small Town

question 55

Multiple Choice

A factory is planning to open in a small town that is currently struggling economically. The town residents should expect a(n) ________.

• A)improved economy
• B)reduced taxes
• C)increase in natural resources
• D)lower standards of living

---

Definitions:

Variable Costs

Variable costs that change in direct correlation with production output or sales figures, like labor costs and materials expenses.

Fixed Costs

Expenses that do not change in total despite fluctuations in the volume of goods or services produced or sold.

Flexible Budget

A budget that adjusts or varies with changes in the volume of activity, often used to provide more realistic performance comparisons.

Variable Costs

Variable Costs are expenses that vary in direct proportion to changes in the levels of an activity or production volume, such as materials and labor costs.