Select the Incorrect Statement Regarding the Relationship Between Cost Behavior

question 79

Multiple Choice

Select the incorrect statement regarding the relationship between cost behavior and profits.

• A) A pure variable cost structure offers higher potential rewards.
• B) A pure fixed cost structure offers more security if volume expectations are not achieved.
• C) In a pure variable cost structure, when revenue increases by $1, so do profits.
• D) In a pure fixed cost structure, the unit selling price and unit contribution margin are equal.

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Definitions:

Hydraulic Hose

A flexible tube used to convey hydraulic fluid between components in a hydraulic system, allowing for the transmission of power.

#6 Dash

A designation used in the hydraulic industry to specify hose or fitting size, equivalent to a 3/8-inch size.

Hydraulic Fittings

Components used to connect tubes, pipes, and hoses in hydraulic systems, securing high-pressure fluid flow.

Pipe Seal Compound

A chemical substance used to create a leak-proof and pressure-tight seal on pipe threads or joints.