Select the Incorrect Statement Regarding the Relationship Between Cost Behavior

question 79

Multiple Choice

Select the incorrect statement regarding the relationship between cost behavior and profits.

• A) A pure variable cost structure offers higher potential rewards.
• B) A pure fixed cost structure offers more security if volume expectations are not achieved.
• C) In a pure variable cost structure, when revenue increases by $1, so do profits.
• D) In a pure fixed cost structure, the unit selling price and unit contribution margin are equal.

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Definitions:

Cap-And-Trade

An environmental policy tool that limits greenhouse gas emissions by allocating emission allowances and permitting the trading of these allowances among emitters.

Market Approach

An economic method that determines the value of a business, business ownership interest, or security using one or more methods that compare the subject to similar businesses, business ownership interests, or securities that have been sold.

Genuine Progress Indicator

An economic measure that accounts for welfare, incorporating factors like environmental health and social well-being, offering an alternative to GDP.

Environmental Costs

The negative impacts on the environment, including pollution, resource depletion, and loss of biodiversity, often not reflected in the market price of goods and services.