When Considering "How Much Home" You Can Afford, You Should

question 46

Multiple Choice

When considering "how much home" you can afford, you should consider all of the following, except

• A) principal and interest payment.
• B) annual homeowner's insurance premium divided by 12.
• C) homeowner's association monthly fee.
• D) A, B and C should all be considered.

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Definitions:

Activity Bases

Measures that assign costs to cost objects based on their use of activities; used in activity-based costing.

Mixed Cost

A cost consisting of both fixed and variable components and changes in response to variations in production or sales levels.

Variable And Fixed Cost

Expenses that include both variable costs, which fluctuate with production or service levels, and fixed costs, which remain constant regardless of activity.

Mixed Cost

A cost consisting of a fixed component and a variable component, changing in total with the level of activity but remaining constant per unit.