Which of the Following Is an Example of a Step-Fixed

question 39

Multiple Choice

Which of the following is an example of a step-fixed cost?

• A)cost of disposable surgical scissors,which are purchased in increments of 100
• B)cost of soaking solution to clean jewellery (each jar can soak 50 rings before losing effectiveness)
• C)cost of tuition at $300 per credit hour up to 15 credit hours (hours taken in excess of 15 hours are free)
• D)cost of disposable gowns used by patients in a hospital

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Definitions:

Short Hedge

A risk management strategy used to offset potential losses in investments by taking an opposite position in related assets or derivatives.

Spot Market

A public financial market where commodities or financial instruments are traded for immediate delivery.

Futures Market

A standardized market for buying and selling contracts that obligate the delivery of commodities, currencies, or financial instruments at a future date.

Simultaneous

Happening, functioning, or being carried out simultaneously.