Which of the Following Is a Typical Example of a Variable

question 181

Multiple Choice

Which of the following is a typical example of a variable cost?

• A)rent on a building
• B)executive salaries
• C)insurance premiums
• D)lease on delivery trucks
• E)cost of maintaining inventory

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Definitions:

Service Life

The estimated period over which a fixed asset is expected to be usable by the entity, impacting its depreciation calculation.

Fair Value

The price at which an asset would be bought or sold in a fair transaction between willing parties.

Resale

Resale refers to the action of selling a product or asset to another party after it has been bought, often used in the context of goods bought for the purpose of selling them at a profit.

Straight-Line Method

A technique for calculating depreciation by uniformly distributing the cost of an asset across its lifespan.