Three Costs Incurred by Randall Rockers Are Summarized Below at Two

question 127

Multiple Choice

Three costs incurred by Randall Rockers are summarized below at two different activity levels, 600 and 700 units: $\begin{array}{rrr}& \text { 600 Units } & \text { 700 Units } \\\operatorname{Cost} \mathrm{A} & \$ 2,700 & \$ 3,150 \\\operatorname{Cost} \mathrm{B} & 2,940 & 3,360 \\\operatorname{Cost} \mathrm{C} & 4,800 & 5,600\end{array}$ Which of these costs is variable?

• A)A, B, and C
• B)A and C
• C)A only
• D)C only

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Definitions:

Salvage Value

The predicted residual worth of an asset at the end of its usefulness.

Cash Inflows

Money or funds entering a business from various sources, including sales, investments, and financing activities.

Capital Budgeting

The process of planning and managing a company's long-term investments in projects or assets.

Discount Rate

The interest rate used to discount future cash flows to their present value, often used in investment and project valuation.