Assuming That All Activity Is Within the Relevant Range, a Decrease

question 92

Multiple Choice

Assuming that all activity is within the relevant range, a decrease in the activity level in a flexible budget will

• A) decrease total fixed costs.
• B) decrease the variable cost per unit.
• C) decrease total costs.
• D) increase the variable cost per unit.

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Definitions:

Revolving Credit

A flexible credit line that allows individuals or businesses to borrow, repay, and borrow again up to a certain limit, commonly seen in credit cards and lines of credit.

Interest Expense

It refers to the cost incurred by an organization or individual for borrowing funds, typically represented as a yearly interest rate applied to the loan's principal amount.

Prime Rate

The interest rate that banks charge their most credit-worthy customers, often used as a benchmark in lending rates.

Tender Offer

A public, open offer or invitation (usually made by a company) to all shareholders to tender their stock for sale at a specific price during a certain time frame.