Classifying Costs by Behavior with Changes in Volume of Activity

question 128

Multiple Choice

Classifying costs by behavior with changes in volume of activity involves:

• A)Identifying fixed costs and variable cost.
• B)Identifying cost of goods sold and operating costs.
• C)Identifying costs as financial or managerial.
• D)Identifying costs in a physical manner.
• E)Identifying both quantitative and qualitative cost factors.

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Definitions:

Deferred Tax Liability

Deferred Tax Liability is a tax that is assessed or is due for the current period but has not yet been paid, often resulting from timing differences between book and tax deductions.

Economic Depreciation

A decrease in the value of an asset due to changes in market conditions or technology, as opposed to physical wear and tear.

Tax Deductible

Expenses that can be subtracted from gross income to reduce taxable income, effectively lowering the overall tax liability.

Tax Purposes

The reason or objective behind the implementation of taxes or certain tax guidelines, often related to income, business expenses, and investments.