The Costs of Services Charged to a Profit Center on the Basis

question 131

Multiple Choice

The costs of services charged to a profit center on the basis of its use of those services are

• A)operating expenses
• B)noncontrollable charges
• C)support department allocations
• D)activity charges

---

Definitions:

Cost-Volume-Profit Graph

A visual representation that shows how changes in cost and volume affect a company's profit.

Step-Wise Costs

Costs that remain fixed over a range of activity but will increase in a step-like manner when a certain threshold is reached.

Break-Even Points

The volume of production or sales at which total revenues equal total expenses, resulting in no net profit or loss, used for financial analysis and planning.

Break-Even Point

The financial stage where total revenues equal total expenses, resulting in neither profit nor loss.