Which of the Following Statements Regarding Incremental Analysis Is True

question 23

Multiple Choice

Which of the following statements regarding incremental analysis is true? Assume that there are no opportunity costs and that the capacity exists to complete any of the alternatives.

• A)The preferred alternative will have revenues that are greater than the revenues of the other alternatives.
• B)The preferred alternative will have expenses that are greater than the expenses of the other alternatives.
• C)The preferred alternative will have fixed expenses that are less than the fixed expenses of the other alternatives.
• D)The preferred alternative will have profits that are greater than the profits of the other alternatives.

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Definitions:

Total Wages Paid

The aggregate amount of wages or salaries disbursed by an employer to its employees over a given period.

FUTA Tax

The Federal Unemployment Tax Act (FUTA) tax is a payroll tax paid by employers to fund state workforce agencies and unemployment insurance.

State Unemployment Taxes

Taxes paid by employers to their state government to fund unemployment insurance benefits for workers who have lost their jobs.

Payroll Tax

Taxes imposed on employers or employees, usually calculated as a percentage of the salaries that employers pay their staff.