A Nonlinear Cost Function

question 108

Multiple Choice

A nonlinear cost function

• A) has two constants and a single slope.
• B) does not effectively describe the behaviour of costs all of the time.
• C) never describes the behaviour of costs in relation to the cost driver.
• D) always describes the behaviour of costs in relation to the cost drivers.
• E) means the relevant range cannot be determined for that cost.

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Definitions:

Accounts Payable

Liabilities representing amounts owed by a company to creditors for purchases of goods or services on credit, typically due within a short period.

Accrue Cost

The process of recording expenses and liabilities as soon as they are incurred, regardless of when cash is exchanged.

Accounting Cycle

The collective process of identifying, analyzing, and recording the accounting events of a company.

Post-closing Trial Balance

A trial balance prepared after closing entries are made, used to check the balance of debits and credits have been maintained throughout the period after all closing entries are completed.