Which of the Following Is Most Likely to Be a Cost

question 128

Multiple Choice

Which of the following is most likely to be a cost driver for the variable portion of marketing costs?

• A) percentage of markup on cost
• B) number of units produced
• C) increase in revenues attributable to such marketing
• D) number of units units sold

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Definitions:

Floatation Costs

Costs a company faces when issuing new securities, such as underwriter fees, legal charges, and registration expenses.

Firm Commitment

A firm commitment refers to an underwriter's agreement to assume all inventory risk and purchase all securities directly from the issuer for sale to the public.

Underwriter

A professional who assesses and accepts the risk of an insurance policy or security, determining pricing and coverage.

Direct Costs

Expenses that can be directly tied to the production of specific goods or services, such as raw materials and labor.