In an REA Diagram,the Pair of Numbers Next to Each

question 35

Multiple Choice

In an REA diagram,the pair of numbers next to each entity represents the cardinalities for the entity.The first number in the pair is known as

• A)the minimum cardinality.
• B)the maximum cardinality.
• C)the x axis cardinality.
• D)the y axis cardinality.

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Definitions:

Fixed Costs

Expenses that do not change with the level of production or sales, including rent, salaries, and insurance, providing contrast to variable costs.

Operating Income

Earnings before interest and taxes (EBIT), calculated as gross income minus operating expenses, excluding non-operating income and expenses.

Variable Product Cost

Costs that vary directly with the level of production, such as materials and labor.

Total Fixed Overhead

The sum of all costs that remain constant regardless of the level of production or sales, such as rent, salaries, and insurance.