Dizzy Gives Out a Free T-Shirt to Every 100th Customer

question 178

Multiple Choice

Dizzy gives out a free T-shirt to every 100th customer entering the park.The cost of this T-shirt would best be described as a:

• A) fixed cost
• B) mixed cost
• C) step-variable cost
• D) true variable cost

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Definitions:

Income Statement

A financial statement that shows a company's revenues and expenses over a specific period, resulting in net income or loss.

Balance Sheet

A financial statement that summarizes a company's assets, liabilities, and shareholders' equity at a specific point in time.

Direct Method

One of two methods of preparing the net cash flow from operating activities section of the statement of cash flows. Each of the major areas of sources and uses of cash for operations is detailed separately.