Which of the Following Defines Variable Cost Behavior

question 54

Multiple Choice

Which of the following defines variable cost behavior?
Total cost reaction          Cost per unit reaction
to increase in activity      to increase in activity

• A)remains constant remains constant
• B)remains constant increases
• C)increases increases
• D)increases remains constant

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Definitions:

Oil Well

A drilling operation focused on extracting petroleum or natural gas from underground reservoirs, usually involving significant exploration and investment.

Goodwill

The excess of the purchase price over the fair value of identifiable assets and liabilities acquired in a business combination.

Excess Cost

This refers to the additional amount paid over the book value of an asset in a purchase consideration.

Goodwill

An intangible asset that arises when a company is purchased for more than the fair market value of its net assets, representing reputation, brand, or intellectual property.