Which of the Following Costs, If Expressed on a Per

question 184

Multiple Choice

Which of the following costs, if expressed on a per unit basis, would be expected to decrease as the level of production and sales increases?

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

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Definitions:

T-Bond Futures

Futures contracts based on the expected value of U.S. Treasury bonds, used by investors to speculate on or hedge against future interest rate movements.

Swap

A financial agreement in which two parties exchange cash flows or liabilities from two different financial instruments.

Intrinsic Value

The inherent, objective value of an asset, investment, or company based on its fundamentals, without regard to market value.

Time Value

The concept that money available now is worth more than the same amount in the future due to its potential earning capacity, reflecting the opportunity cost of waiting.