Which Approach Examines Common Variance

question 7

Multiple Choice

Which approach examines common variance?

• A)logical-content strategy
• B)theoretical strategy
• C)criterion strategy
• D)factor analytic strategy

---

Definitions:

Variable Costs

Expenses that vary in direct relation to the amount of output or sales.

Fixed Costs

Expenses that do not change with the level of output or sales, such as rent, salaries, and insurance, remaining constant regardless of business activity levels.

Margin of Safety

The difference between actual or anticipated sales and the sales level at the break-even point, measured to assess the risk of not covering fixed costs.

Contribution Format

A method of income statement presentation where costs are separated into variable and fixed categories, emphasizing the contribution margin.