When Other Factors Remain Constant, an Increase in Variable Costs

question 43

Multiple Choice

When other factors remain constant, an increase in variable costs:

• A) Increases the number of units needed to earn profits
• B) Decreases the number of units needed to earn profits
• C) Has no effect on the number of units needed to earn profits
• D) Decreases the number of units needed to break even

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Definitions:

Risk of Loss

The responsibility for the loss of goods during shipment, transfer, or at any time before the completion of a sale, typically determined by contract terms.

Shipment Contract

A type of sales contract where the seller is required to send the goods to the buyer, but the risk of loss passes when the goods are handed to the carrier.

Risk of Loss

A legal term referring to the responsibility for damage, destruction, or loss of goods, especially in the context of the sale or transport of those goods.

Hijacked

When something is hijacked, it is taken control of forcefully or unlawfully, often referring to vehicles like planes or trucks, but also can describe situations where control is usurped illegally or unethically.