Variable Cost

question 70

Multiple Choice

Variable cost:

• A)increases on a per unit basis as the number of units produced increases.
• B)remains constant on a per unit basis as the number of units produced increases.
• C)remains the same in total as production increases.
• D)decreases on a per unit basis as the number of units produced increases.

---

Definitions:

Coinsurance Clause

A provision in an insurance policy that defines the percentage of the claim amount to be shared between the insurer and the insured.

Short-rate Refund

A return of a portion of the premium on an insurance policy that is canceled by the policyholder before its expiration, calculated at less than a pro-rata basis.

Premium Rate

The cost rate of insurance coverage per unit of coverage, reflecting the risk and administrative costs.

Coinsurance Clause

A provision in an insurance policy that defines the split of responsibility for payment between the insurer and the insured.