The True Statement About Cost Behavior Is That

question 100

Multiple Choice

The true statement about cost behavior is that:

• A) variable costs are constant on a per-unit basis and change in total as activity changes.
• B) fixed costs are constant on a per-unit basis and change in total as activity changes.
• C) fixed costs are constant on a per-unit basis and constant in total as activity changes.
• D) variable costs change on a per-unit basis and change in total as activity changes.
• E) variable costs are constant on a per-unit basis and are constant in total as activity changes.

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Definitions:

Limited Liability

A legal structure that limits the financial responsibility of individuals (e.g., shareholders of a company) to the amount they have invested.

Corporation's Liabilities

The financial obligations or debts for which a corporation is legally responsible.

Liability Limitation

A clause in a contract that restricts the amount of compensation that can be claimed for breaches of the contract or other liabilities.

Cash Assets

Liquid funds or assets readily convertible into cash without significant loss in value.