Which of the Following Costs Changes in Direct Proportion to a Change

question 20

Multiple Choice

Which of the following costs changes in direct proportion to a change in the activity level?

• A) Variable cost.
• B) Fixed cost.
• C) Semivariable cost.
• D) Step-variable cost.
• E) Step-fixed cost.

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Definitions:

Controllable Margin

The portion of operating income that can be directly controlled or influenced by managers at certain levels of an organization.

Operating Assets

Assets directly involved in the manufacturing or sale of products or services in the normal course of business.

Return on Investment

A measure of the profitability of an investment, calculated as the net profit of the investment divided by the initial cost.

Controllable Fixed Costs

Expenses that can be managed or influenced by decisions made by a company's management, such as advertising expenditures.