Which of the Following Describes the Behavior of a Variable

question 21

Multiple Choice

Which of the following describes the behavior of a variable cost per unit?

• A) varies in increasing proportion with changes in the activity level
• B) varies in decreasing proportion with changes in the activity level
• C) remains constant with changes in the activity level
• D) varies in direct proportion with the activity level

Grasp the circumstances under which formal family investment funds are established.

Comprehend the importance of a transgenerational commitment and leadership model in family businesses.

Understand the purpose and outcomes of effective dialogue within enterprising families.

Clarify the impact of family ownership vision and leadership on startup decision making and strategic directions.

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Definitions:

Variable Manufacturing Overhead

The portion of manufacturing overhead costs that varies with production volume.

Opportunity Cost

The value of the best alternative foregone as a result of making a decision, representing the benefit that could have been gained from the next best choice.

Fixed Manufacturing Cost

This refers to the consistent expenses incurred by a company for its manufacturing operations, excluding variable costs; it includes costs like rent, salaries of permanent staff, and depreciation of factory equipment.

Variable Manufacturing Cost

Costs that vary directly with the level of production output, such as raw materials and direct labor.