A Graph with the Amount of Some Cost Driver on the "X

question 73

Multiple Choice

A graph with the amount of some cost driver on the "x" axis and the cost of production on the "y" axis that is a straight line, with an upward slope, starting with $5,000 of costs at zero levels of production, would indicate which type of cost relationship?

• A) Fixed responsiveness
• B) Proportional responsiveness
• C) Semi-variable costs
• D) Step costs

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Definitions:

Amortize Discount

The gradual reduction of a bond discount over the life of the bond, expensed as interest over the period.

Straight-Line Method

The Straight-Line Method is a way of calculating depreciation of an asset, where the asset's cost is evenly spread over its useful life.

Other Than Temporary

Classification of impairments or losses indicating that the reduction in value is not expected to reverse in the near future.

Held To Maturity

A classification for investments in debt securities that the company has the positive intent and ability to hold until they mature.