Information Is Relevant in Business Decisions If It Is A(n)________

question 81

Multiple Choice

Information is relevant in business decisions if it is a(n) ________.

• A)expected future cost or it differs among alternatives
• B)expected future cost and it differs among alternatives
• C)historical cost and it differs among alternatives
• D)expected future cost that differs from a past cost

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Definitions:

Fixed Costs

Fixed costs are business expenses that remain constant regardless of the level of production or sales, such as rent, salaries, and insurance premiums.

Total Fixed Costs

Expenses that do not change with the level of production or sales over a short period, including rent, insurance, and salaries.

Activity Level

In cost accounting, this refers to the volume of production or operations, impacting variable costs and potentially influencing budgeting and performance measures.

Contribution Margin

The contribution margin is the difference between sales revenue and variable costs, showing how much revenue contributes to fixed costs and profit.