If the Multiplier Is 6

question 50

Multiple Choice

If the multiplier is 6.25, then the MPC is

• A)0.2.
• B)0.6.
• C)0.75.
• D)0.84.

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Definitions:

Fixed Manufacturing Costs

Expenses that do not vary with the level of production or sales, such as rent, salaries, and insurance for a manufacturing facility.

Variable Selling

Refers to costs that vary directly with changes in the volume of sales. These can include commissions, shipping fees, and packaging costs.

Administrative Expenses

Administrative expenses are the costs related to the general operation of a business, including items like office supplies, salaries of administrative personnel, and other non-production costs.

Fixed Expenses

Costs that do not fluctuate with the volume of production or sales, such as rent, salaries, and insurance premiums.