When Variable Costing Is Used, and If Selling Prices Exceed

question 44

True/False

When variable costing is used, and if selling prices exceed variable expenses and if the unit contribution margins, the sales mix, and fixed costs remain the same, profits move in the same direction as sales.

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Definitions:

Price Discrimination

A pricing strategy where a seller charges different prices for the same product or service to different consumers, based on their willingness to pay.

Durable Good

A consumer good with an expected life (use) of three or more years.

Elastic Demand

A situation in which the demand for a product or service changes significantly in response to changes in price.

Concession Items

Products sold typically at entertainment venues, such as cinemas or sports arenas, often comprising snacks, drinks, and other quick-service foods.