Costs That Vary in Total in Direct Proportion to Changes

question 79

Multiple Choice

Costs that vary in total in direct proportion to changes in an activity level are called

• A) fixed costs
• B) sunk costs
• C) variable costs
• D) differential costs

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Definitions:

Market Price

The ongoing transaction price for purchasing or offloading an asset or service.

Profit Maximization

A business's objective to achieve the highest possible profits through the management of revenues and costs, often through adjusting price, output, and production efficiency.

All-Natural Ice Cream

Ice cream made using only natural ingredients, without artificial flavors, colors, or preservatives.

Market Price

The price at which a good or service is offered in the marketplace, determined by supply and demand dynamics.