Variable Costs Within the Relevant Range

question 185

Multiple Choice

Variable costs within the relevant range

• A) stay constant on a per unit basis as output changes.
• B) increase in total as output increases.
• C) decrease in total as output decreases.
• D) All of these are correct.

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Definitions:

Net Operating Income

A financial metric that calculates a company's profitability by subtracting operating expenses from its operating income.

Variable Costing

A method of costing that includes only variable production costs (costs that vary with production volume) in the cost of goods sold and excludes fixed manufacturing overhead.

Net Operating Income

Earnings derived from a company's regular business activities, excluding deductions of interest and taxes.

Net Operating Income

Income from a company's operations, excluding taxes and interest, reflecting the profitability of the core business activities.