If Each Motorcycle Requires a Belt That Costs $20 and 2,000

question 14

Multiple Choice

If each motorcycle requires a belt that costs $20 and 2,000 motorcycles are produced for the month, the total cost for belts is ________.

• A) considered to be a direct fixed cost
• B) considered to be a direct variable cost
• C) considered to be an indirect fixed cost
• D) considered to be an indirect variable cost

---

Definitions:

Real Asset

Tangible property such as real estate, commodities, and physical goods that have intrinsic value due to their substance and physical properties.

Financial Asset

An asset that encompasses cash, a stake in a company, or a binding agreement to either receive or provide cash or a different financial instrument.

Treasury-bill Rate

The interest rate paid by U.S. Treasury bills, considered a benchmark for risk-free rates in the United States.

Fair Return

The reasonable profit that investors can expect to earn from their investment, considering the risk involved.