An Accountant May Have Difficulty Classifying Costs as Fixed or Variable

question 18

Multiple Choice

An accountant may have difficulty classifying costs as fixed or variable because:

• A) the decision situation may cause the costs to be fixed in the short term
• B) costs may be affected by more than one cost driver
• C) costs may behave in a nonlinear way
• D) All of these answers are correct.

---

Definitions:

Market Value

The current quoted price at which an asset or company can be bought or sold on the open market.

November 47.50 Call

A call option contract for the right to buy a specific financial instrument at a price of 47.50, expiring in November.

Call

A Call option is a financial contract that gives the option buyer the right, but not the obligation, to buy a stock, bond, commodity, or other asset at a specific price within a specific period.

European Put

A type of option contract that gives the holder the right, but not the obligation, to sell an underlying asset at a specified price on or before a specific date.