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Which of the Following Statements Is TRUE

question 12

Multiple Choice

Which of the following statements is TRUE?


Definitions:

Variable Costs

Costs that vary directly with the level of production or business activity.

Fixed Costs

Fixed costs are business expenses that remain constant regardless of the level of production or sales.

Fixed Costs

Costs that do not change with the level of output or sales over a certain period, such as rent or salaries.

Contribution Margin

The contribution margin represents the portion of sales revenue that is not consumed by variable costs and is available to cover fixed costs and generate profit.

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