Suppose That M Doubles and PQ Remains the Same

question 237

Multiple Choice

Suppose that M doubles and PQ remains the same.In that case we know that V

• A)fell by 100%.
• B)fell by 50%.
• C)stayed the same.
• D)rose by 50%.
• E)rose by 100%.

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Definitions:

Fixed Costs

Expenses that do not change in proportion to the level of production or sales activity within a certain range.

Plantwide Overhead Rate

A single rate used to allocate all of a plant's manufacturing overhead costs to its production activities based on a uniform cost-driver.

Cost Driver

An element that influences the expense of an operation or procedure to vary, utilized in activity-based costing for more precise cost allocation.

Support Department

An organizational unit that provides essential services, such as human resources or IT support, but does not directly contribute to the production of goods or services.