Which of the Following Statements Is True of Variable Costs

question 83

Multiple Choice

Which of the following statements is true of variable costs incurred by firms?

• A)These costs are independent of the number of goods produced by firms.
• B)The rent and interest paid by firms are examples of variable costs.
• C)These costs are the difference between what firms charge for their products and the fixed costs of the product.
• D)These costs change directly with the units produced.
• E)These costs refer to the total amount of margin made by a firm.

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Definitions:

Liabilities

Financial obligations or debts owed by a business to another entity, payable in the future.

Owner's Equity

The residual interest or ownership claim in the assets of an entity after deducting its liabilities.

Balance Sheet

A financial statement that reports a company's assets, liabilities, and shareholders’ equity at a specific point in time.

Liabilities

Financial obligations or debts a company owes to external parties or entities.