Which of the Following Amounts of a Flexible Budget Remains

question 201

Multiple Choice

Which of the following amounts of a flexible budget remains constant,within the specified relevant range,when the sales volume changes?

• A) total contribution margin
• B) total fixed costs
• C) total variable costs
• D) total sales revenue

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Definitions:

High-low Method

A technique used in cost accounting to estimate variable and fixed costs based on the highest and lowest levels of activity during a period.

Contribution Margin

The amount by which the sale of a product exceeds its variable costs, indicating how much contributes towards covering fixed costs and generating profit.

Monthly Fixed Manufacturing Cost

Regular, unchanging costs incurred by a manufacturing facility each month regardless of the volume of production, such as rent, salaries, and insurance.

Office Expense

Costs related to the day-to-day operations of an office, including supplies, utilities, and administrative salaries.