Which of the Following Costs Changes in Direct Proportion to a Change

question 20

Multiple Choice

Which of the following costs changes in direct proportion to a change in the activity level?

• A) Variable cost.
• B) Fixed cost.
• C) Semivariable cost.
• D) Step-variable cost.
• E) Step-fixed cost.

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Definitions:

Costs

The amount of money required to purchase goods or services, or the expenses associated with manufacturing a product or providing a service.

Internal Failure Costs

Costs incurred to remedy defects found before the delivery of a product to the customer, such as waste, scrap, and rework.

Activity Costs

Expenses directly associated with specific activities, such as manufacturing, marketing, or research and development.

External Failure Cost

Costs incurred when a product fails to meet quality standards after it has been delivered to the customer, including warranty claims and returns.