A Leased Factory Building Has a Fixed Monthly Rental Payment

question 123

Multiple Choice

A leased factory building has a fixed monthly rental payment, and a variable overhead cost of energy and indirect labour.Which of the following is TRUE, assuming that all activity levels are within the relevant range?

• A)Variable OVH costs will increase as production increases, but Fixed OVH costs will decrease.
• B)Variable OVH costs will decrease as production increases, but Fixed OVH costs will increase.
• C)Variable OVH costs will increase as production increases, and Fixed OVH costs will increase.
• D)Variable OVH costs will increase as production increases, but Fixed OVH costs will remain constant.
• E)Both will increase with production, but at different rates.

---

Definitions:

Lead-Time Bias

A bias in screening tests that occurs when the detection of a disease at an early stage artificially seems to increase the survival time without actually affecting the course of the disease.

Early Diagnosis

The process of detecting a disease or condition at an early stage, allowing for more effective management and treatment outcomes.

Screening Program

is a public health service in which members of a defined population, who do not necessarily perceive they are at risk of a disease or its complications, are asked a question or offered a test, to identify those individuals who are more likely to be helped than harmed by further tests or treatment to reduce the risk of a disease or its complications.

Preclinical Phase

A stage of research that precedes clinical trials, involving laboratory and animal studies to determine a drug's safety and efficacy.