When the Volume of Activity Increases Within the Relevant Range

question 164

Multiple Choice

When the volume of activity increases within the relevant range, the fixed cost per unit

• A) decreases.
• B) increases at first, then decreases.
• C) remains the same.
• D) increase.

Calculate the effect of changing selling prices and advertising expenses on net operating income.

Understand the concept of margin of safety and how it is calculated.

Calculate the net operating income based on given financial data and changes in business strategy.

Understand the impact of sales commissions and sales staff salary changes on net operating income.

---

Definitions:

RC7S

RC7S refers to a specification for a surface finish, indicating the roughness and texture desired on a machined surface, often used in engineering drawings.

Basic Shaft System

A referencing system for tolerances in mechanical engineering, focusing on the dimensions and fit of shafts.

Basic Hole System

A system of fits commonly used in engineering where the hole size is kept constant, and the shaft size is varied to achieve the desired fit.