Holding All Other Things Constant, an Increase in Fixed Selling

question 41

Multiple Choice

Holding all other things constant, an increase in fixed selling costs will affect:

• A) the markup under the absorption costing approach to cost-plus pricing.
• B) the markup used to compute the profit-maximizing price.
• C) both the markup under the absorption costing approach to cost-plus pricing and the markup used to compute profit-maximizing price.
• D) neither the markup under the absorption costing approach to cost-plus pricing nor the markup used to compute profit-maximizing price.

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Definitions:

Population Variance

A measure of the spread of a population’s values, indicating how much the individuals within the population differ from the population mean.

Chi-Squared Distributed

Referring to a statistical distribution that is used to describe the distribution of the sum of squares of a set of variables, often used in hypothesis testing.

T-Distribution

A statistical distribution that occurs when calculating the average of a population with a normal distribution, under conditions where the sample size is small and the population's variance is not known.

Degrees of Freedom

The number of independent values or quantities that can vary in a statistical calculation.