A Cost That Increases in Total but Decreases Per Unit

question 14

Multiple Choice

A cost that increases in total but decreases per unit as the cost driver increase is a(n) :

• A)Activity cost
• B)Variable cost
• C)Fixed cost
• D)Mixed cost

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Definitions:

Dividend Income

Income received from owning shares in a company, typically paid out of the company's profits.

Capital Gains

The profit made from the sale of an asset, such as stocks or property, which exceeds its original purchase price.

Target Payout Ratio

The percentage of net income that a firm aims to pay out to its shareholders as dividends.

Earnings

The amount of profit that a company produces during a specific period, indicative of its financial health and performance.