As the Level of Activity Increases, the Total Variable Costs

question 53

Multiple Choice

As the level of activity increases, the total variable costs for the period

• A)decrease.
• B)increase.
• C)do not change.
• D)may increase or decrease.

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Definitions:

Preferred Stock

A class of ownership in a corporation that has a higher claim on assets and earnings than common stock, typically with dividends that must be paid out before dividends to common stockholders.

Par Value

A nominal or face value assigned to a share of stock by the company's charter, which may not reflect the actual market value.

Paid-In Capital

Funds raised by a company from selling its shares to investors, beyond the nominal value of the shares.

Cash Dividend

A payment made by a company out of its earnings to investors in the form of cash.