Which of the Following Costs, If Expressed on a Per

question 39

Multiple Choice

Which of the following costs, if expressed on a per unit basis, would be expected to vary inversely with the level of production and sales?

• A)Sales commissions.
• B)Fixed manufacturing overhead.
• C)Variable manufacturing overhead.
• D)Direct materials.

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Definitions:

Net Income

The net income of a business following the subtraction of all costs, taxes, and operational expenses from its revenue.

Straight-Line Depreciation

A method of allocating an asset's cost evenly over its useful life, resulting in a constant annual expense.

Journal Entry

A record in accounting that documents a business transaction and its effect on various accounts, used to keep track of financial events by debits and credits.

Residual Value

The estimated amount that an asset will realize upon its sale at the end of its useful life.