The Following Data Have Been Collected for Four Different Cost

question 53

Short Answer

The following data have been collected for four different cost items. Which of the following classifications of these cost items by cost behavior is correct?

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Definitions:

Operating Activity

Activities directly related to the primary business operations of a company, including production, distribution, and sales of goods and services.

Payment Of Dividends

The distribution of a portion of a company's earnings to its shareholders, usually in the form of cash or additional shares.

Interest Expense

The expense that an entity has to bear for the money it borrows over a certain duration.

Preferred Stock

A type of stock that offers dividends at a fixed rate and has priority over common stock in the distribution of assets during a company's liquidation.