Which of the Following Statements Is True

question 164

Multiple Choice

Which of the following statements is true?

• A) There is a cause-and-effect relationship between the cost driver and the amount of cost.
• B) Fixed costs have cost drivers over the short run.
• C) Over the short run all costs have cost drivers.
• D) Volume of production is a cost driver of distribution costs.

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Definitions:

Directly Related

A relationship between two variables in which they move in the same direction.

Consumer's Income

The sum of money a consumer can spend on products and services.

Budget Line

A visual depiction of every potential combination of two products that can be bought within a specific budget at fixed prices.

After-Tax Income

The amount of net income remaining after all taxes (federal, state, local) have been deducted from the gross income.