A Step Variable-Cost Function

question 95

Multiple Choice

A step variable-cost function:

• A)is often approximated with a continuous variable-cost function.
• B)remains the same over a wide range of activity.
• C)example includes adding additional warehouse space.
• D)is fixed over the long run but not over the short run.

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Definitions:

Consolidated Income Statement

A income statement that combines the financial performance of all subsidiaries with the parent company, eliminating intercompany transactions.

Income Tax Rate

The proportion of income that is taken from a person or business in the form of taxes.

Consolidated Retained Earnings

The portion of earnings not distributed as dividends but retained by the parent company and its subsidiaries for reinvestment.

Intercompany Sales

Transactions of goods and services between subsidiaries within the same parent company, requiring elimination during consolidation for accurate financial statements.