What Type of Cost Exhibits the Behavior That Follows

question 63

Multiple Choice

What type of cost exhibits the behavior that follows?

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

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Definitions:

Borrowing Costs

Expenses incurred by an entity for borrowing funds, including interest, fees, and other charges associated with the issuance of debt.

Option Contract

A financial derivative that gives the buyer the right, but not the obligation, to buy or sell an underlying asset at an agreed-upon price within a certain period of time.

Futures Contract

A standardized legal agreement to buy or sell something at a predetermined price at a specified time in the future, typically traded on a futures exchange.

Futures Option

A financial derivative that gives the holder the right, but not the obligation, to buy or sell a futures contract at a specified price on or before a certain date.