Within the Relevant Range, Variable Costs Can Be Expected To

question 276

Multiple Choice

Within the relevant range, variable costs can be expected to:

• A) vary in total in direct proportion to changes in the activity level.
• B) remain constant in total as the activity level changes.
• C) increase on a per unit basis as the activity level increases.
• D) increase on a per unit basis as the activity level decreases.

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Definitions:

Accounting Cycle

The process of recording, classifying, summarizing, and interpreting financial transactions over a fiscal period, culminating in the preparation of financial statements.

Purchasing Cycle

A series of steps that a company goes through to acquire goods or services, from the identification of a need to the approval of the invoice for payment.

Operating Cycle

The period of time it takes for a business to acquire inventory, sell it, and convert the sale into cash.

Merchandising Cycle

The process involved in buying and selling goods, including purchasing inventory, selling to customers, and managing cash and credit transactions.