Which of the Following Costs Would Most Likely Be Classified

question 123

Multiple Choice

Which of the following costs would most likely be classified as variable, assuming the account analysis method is used to determine cost behaviors?

• A) Indirect materials.
• B) Supervisory salaries.
• C) Equipment maintenance.
• D) Building occupancy costs.

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Definitions:

Marginal Expenditure

The supplementary cost resulting from acquiring an extra unit of a good or service.

Economic Rent

Economic rent is the excess payment made to or received by a factor of production over and above what would have been needed to bring that factor into production.

Competitive Factor Market

A market for inputs where firms purchase resources necessary for production, characterized by many sellers and buyers.

Inframarginal Workers

Employees whose productivity and wage are above the minimum required for employment, but are not the highest performers.