Which of the Following Statements Most Accurately Explains the Behavior

question 75

Multiple Choice

Which of the following statements most accurately explains the behavior of costs?

• A) There is no norm; rather, costs can be fixed, variable, or a combination of both.
• B) The majority of costs are variable per unit of production.
• C) The majority of costs are fixed per unit of production.
• D) Costs can be fixed or variable but usually not a combination of both.

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Definitions:

Adjusting Entry

A journal entry made at the end of an accounting period to allocate revenue and expenses to the appropriate periods.

December Rent

A specific expense related to the leasing of property or space that is due in the month of December.

Adjusting Entries

Ledger entries prepared at an accounting cycle's end to correctly allocate income and expenses to the period they occurred.