Because Fixed Costs Generally Do Not Change in the Short

question 4

Multiple Choice

Because fixed costs generally do not change in the short term:

• A)CVP is not appropriate if fixed costs are low.
• B)They are generally not included as a component in CVP analysis.
• C)Decreasing contribution margin increases profit by an identical amount.
• D)Increasing contribution margin increases profit by an identical amount.
• E)None of the above.

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Definitions:

Resource-Based Relative Value Scale

A schema used to determine how much medical providers should be paid, based on the value of the services they provide.

Payment System

A mechanism or a set of instruments that facilitates the transfer of funds from one entity to another, which can be operated by financial institutions, electronic systems, or through manual processes.

Medicare Managed Care

A type of Medicare health plan provided by private companies that contract with Medicare to provide all Part A and Part B benefits and often Part D (prescription drug coverage) as well.

Primary Care Physician

A healthcare provider who offers general medical treatment to patients and is usually the first point of consultation for all health issues.