An Item or Event That Has a Cause-Effect Relationship with the Incurrence

question 144

Multiple Choice

An item or event that has a cause-effect relationship with the incurrence of a variable cost is called a

• A)mixed cost.
• B)predictor.
• C)direct cost.
• D)cost driver.

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Definitions:

Operating Results

The outcomes or the financial performance of a business's operations, often presented in the form of income statements displaying revenues, expenses, and net profits or losses.

Contribution Margin

The margin created by subtracting variable costs from sales revenue, which is utilized to pay for fixed expenses and create profit.

Fixed Costs

Expenses that do not change with the level of production or sales over a certain period, such as rent, salaries, and insurance.

Financial Advantage

The benefit gained from making a particular financial decision, often represented by gains in revenue or reductions in costs.