Which of the Following Is a Quantity Discount That Involves

question 46

Multiple Choice

Which of the following is a quantity discount that involves a one-time reduction in price?

• A) Cash discount
• B) Noncumulative quantity discount
• C) Trade discount
• D) Cumulative quantity discount
• E) Consumer discount

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Definitions:

Variable Costs

Costs that change in proportion to the amount of goods produced or the volume of sales, like labor and materials.

Contribution Margin Ratio

The ratio that represents what percentage of sales contributes to the covering of fixed costs, calculated by subtracting variable costs from sales revenue and dividing the result by sales revenue.

Operating Income

Earnings from a company's core business operations, excluding revenue and expenses from non-operating activities like investments.

Variable Costs

Costs that vary depending on a company’s level of activity.