Variable Cost Per Unit

question 54

Multiple Choice

Variable cost per unit

• A)increases when the number of units produced increases.
• B)does not change when the number of units produced increases.
• C)decreases when the number of units produced increases.
• D)decreases when the number of units produced decreases.

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Definitions:

Gross Profit Calculation

The process of determining a company's gross profit by subtracting the cost of goods sold from total revenue.

Allowance for Doubtful Accounts

A contra-asset account used to estimate the portion of a company's accounts receivable that may not be collectible.

Sales Returns

Transactions where customers return previously purchased merchandise, leading to a reduction in sales revenue.

Allowance for Doubtful Accounts

An accounting provision representing the estimated amount of receivables that may not be collected, reducing the accounts receivable balance to its net realizable value.