Which of the Following Statements Is True

question 33

Multiple Choice

Which of the following statements is true?

• A) Revenues remain constant, regardless of the level of business activity
• B) Variable costs remain constant, regardless of the level of business activity
• C) The ratio of fixed to variable costs is likely to decline as business activity increases
• D) The ratio of fixed to variable costs is likely to increase as business activity increases

Identify internal and external users of accounting data and their needs.

Understand the services provided by public and private accountants.

Grasp the sequence and components of the accounting process.

Understand the concept of amortization and how monthly payments are applied to both the principal and interest.

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Definitions:

Marginal Costs

The extra cost incurred by producing one additional unit of a product.

Indifferent

A state where an individual or group has no preference or difference in satisfaction among options, showing no bias or partiality towards any choice.

Break Even

The point at which total costs and total revenues are equal, resulting in no net loss or gain.

Fixed Costs

Costs that do not vary with the level of production or sales, such as rent, salaries, and equipment leases, remaining constant regardless of how much a company produces.