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Your College Has Contracted with a Construction Company to Build

question 93

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Your college has contracted with a construction company to build a new bookstore; in doing so the contractor will use heavy machinery and equipment.How are these items classified?


Definitions:

Activity Level

The volume of production or the degree of service activity which directly affects the amount of various costs incurred.

Fixed Cost

An expense that does not change with the level of production or sales over a short period.

Sales Commissions

The payment given to sales employees based on the amount of sales they generate, typically a percentage of the sale price.

Sales Volume

The amount of goods or services a company sells over a certain time frame.

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