The Higher the Denominator Level of Activity

question 15

Multiple Choice

The higher the denominator level of activity:

• A) the higher the unit product cost.
• B) the lower the unit product cost.
• C) the less likely is the occurrence of a volume variance.
• D) the more profitable operations likely will be.

---

Definitions:

Accounting Information

Financial data and reports generated from the accounting system of a business, used for decision-making and financial analysis.

Limited Liability Company (LLC)

A business form consisting of one or more persons or entities filing an operating agreement with a state to conduct business with limited liability to the owners, yet treated as a partnership for tax purposes.

Missing Amount

A term used in accounting and finance to denote a value that must be found within a set of numbers or financial statements when it is not explicitly provided.

Service Business

A type of business that provides intangible products, such as expertise, time, or effort, to consumers in exchange for payment.