When Testing the Safety of Cars Using Crash Tests, a Sample

question 109

Multiple Choice

When testing the safety of cars using crash tests, a sample of 1 or 2 cars is used because

• A) Sampling is more accurate.
• B) Cars are destroyed.
• C) It is quicker.
• D) The population is very large.

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Definitions:

Variable Selling

Costs that fluctuate in direct proportion to changes in sales volume, such as commissions and shipping charges.

Manufacturing Margin

The excess of sales over variable cost of goods sold.

Contribution Margin

The amount by which sales revenue exceeds variable costs, contributing towards covering fixed costs and generating profit.

Variable Factory Overhead

Costs that vary with the volume of production and include expenses such as indirect materials and utilities.