When Cost Relationships Are Linear,total Variable Prime Costs Will Vary

question 60

Multiple Choice

When cost relationships are linear,total variable prime costs will vary in proportion to changes in

• A)direct labor hours.
• B)total material cost.
• C)total overhead cost.
• D)production volume.

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Definitions:

Warranty of Authority

A representation that a person who purports to act on behalf of another (an agent) has the necessary authority to do so.

Bankruptcy

A legal process for individuals or businesses that are unable to repay their outstanding debts, allowing for the distribution of assets to creditors, potentially leading to the discharge of remaining debts.

Agency Termination

The process of ending the relationship between an agent and their principal, which can occur for various reasons such as fulfillment of the agency purpose or mutual agreement.

Principal and Third Party

Legal terms describing the major participant in a transaction (principal) and an outsider who has a lesser role (third party).