Four Common Cost Behavior Patterns That Serve as the Foundation

question 86

Multiple Choice

Four common cost behavior patterns that serve as the foundation for cost-volume-profit analysis are

• A)variable cost, fixed cost, selling cost, and administrative cost.
• B)variable cost, fixed cost, mixed cost, and step cost.
• C)variable cost, fixed cost, period cost, and other cost.
• D)selling cost, administrative cost, cost of goods sold, and depreciation.

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Definitions:

Allowance

In accounting, an estimate for future adjustments to assets, such as bad debt or depreciation.

Market Value

The current price at which an asset or service can be bought or sold in a public marketplace.

Realized Gains

Profit from the sale or exchange of an asset that exceeds its purchase price.

Investments

Assets purchased with the expectation that they will generate income or will appreciate in value in the future.