Which of the Following Is a True Statement About Cost

question 81

Multiple Choice

Which of the following is a true statement about cost behaviors in incremental analysis?
1. Fixed costs will not change between alternatives.
2. Fixed costs may change between alternatives.
3. Variable costs will always change between alternatives.

• A) 1
• B) 2
• C) 3
• D) 2 and 3

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Definitions:

End-of-period Spreadsheet

A document used in accounting that summarizes all accounts and their balances at the end of an accounting period, helping in the preparation of financial statements.

Journal

A formal accounting record in which transactions are logged before they are posted to ledger accounts, detailing the date, accounts impacted, and amounts involved in each transaction.

Accumulated Depreciation

The total amount of a tangible asset's cost that has been allocated as depreciation expense over its useful life, reducing its book value on the balance sheet.

Operating Expense

Expenses incurred from normal business operations, including salaries, rent, utilities, and equipment depreciation.