The Preferred Cost Drivers for Fixed- Cost Pools and Variable-

question 139

Multiple Choice

The preferred cost drivers for fixed- cost pools and variable- cost pools are .

• A) capacity available and capacity available, respectively
• B) capacity used and capacity used, respectively
• C) capacity used and capacity available, respectively
• D) capacity available and capacity used, respectively

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Definitions:

Price Elasticity

A measure of how much the quantity demanded or supplied of a good changes in response to a change in its price.

Demand

The quantity of a good or service that consumers are willing and able to purchase at various prices during a given time period.

Perfectly Inelastic

Refers to a scenario in which the amount demanded or supplied shows no reaction whatsoever to changes in price.

Total Revenue

The total amount of money earned by a business from the sale of its goods and services.