If Production Volume Increases from 8,000 to 10,000 Units

question 36

Multiple Choice

If production volume increases from 8,000 to 10,000 units,

• A) total costs will increase by 20%.
• B) total costs will increase by 25%.
• C) total variable costs will increase by 25%.
• D) mixed and variable costs will increase by 25%.

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Definitions:

Unrealized Gains

Profits from investments that have increased in value but have not been sold, and therefore are not yet considered income.

Goodwill

An intangible asset that arises when a business is acquired for more than the fair value of its net identifiable assets, reflecting the value of the company’s brand, customer relationships, and other factors.

Common Stock

Equity ownership in a corporation, giving shareholders voting rights and a share in the company's profits through dividends.

Fair Value

The amount one would get from selling an asset or the cost incurred to transfer a liability during a regulated transaction with participants in the market as of the valuation date.