Wu Company Incurred $40,000 of Fixed Cost and $50,000 of Variable

question 78

Multiple Choice

Wu Company incurred $40,000 of fixed cost and $50,000 of variable cost when 4,000 units of product were made and sold. If the company's volume doubles,the company's total cost will:

• A) stay the same.
• B) double as well.
• C) increase but will not double.
• D) decrease.

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Definitions:

Rate of Return

The earnings or losses realized from an investment for a certain period, presented as a proportion of the investment's original expenditure.

First Dividends

The initial distribution of earnings declared by a company to its shareholders.

Constant Dividend

A dividend policy in which a firm aims to distribute a fixed amount or a stable dividend to shareholders per share, unaffected by fluctuations in its earnings or profits.

Required Rate of Return

The minimum expected rate of return on an investment, deemed necessary to compensate for its risk.