Variable Costing Allows a Manager to Classify Controllable Costs as

question 9

Multiple Choice

Variable costing allows a manager to classify controllable costs as

• A) either variable or fixed.
• B) variable only.
• C) fixed only.
• D) either short-term variable or long-term variable.

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Definitions:

Enterprise Multiple

A ratio used to determine the value of a company that takes into account its debt and equity, calculated by dividing the enterprise value by EBITDA.

EBIT

Known as Earnings Before Interest and Taxes, this financial gauge calculates a firm's profitability without considering interest and income tax charges.

Average Collection Period

The average number of days it takes for a company to collect payments from its customers, a measure of the efficiency of its credit policies.

Current Ratio

A liquidity ratio that measures a company's ability to pay short-term obligations with its short-term assets.