Porterhouse Company Has Both Fixed and Variable Production Costs

question 90

Multiple Choice

Porterhouse Company has both fixed and variable production costs. If volume goes up by 20%, how would that affect the total variable costs? (Assume all volumes are within the relevant range.)

• A) Would go up 20%
• B) Would remain the same
• C) Would go up by some amount less than 20%
• D) Would go down

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Definitions:

Carbonate Rocks

Sedimentary rocks primarily composed of carbonate minerals, typically formed in marine environments.

Limestone

A sedimentary rock composed mainly of calcium carbonate, typically formed from the skeletal fragments of marine organisms.

Shales

Fine-grained sedimentary rocks that can split into thin, parallel layers, composed mainly of clay minerals.

Siltstones

Fine-grained sedimentary rocks that consist predominantly of silt particles, smaller than sand grains but larger than clay, often formed in quiet water environments.