A Highly Corrosive Liquid That Is Stored on the Property

question 26

True/False

A highly corrosive liquid that is stored on the property of Acme Waste Disposal leaks from its container and seeps into the foundations of the business next door, badly damaging the building. Acme will be liable only if the injured party can prove Acme was negligent.

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Definitions:

Variable Cost

Costs that change in proportion to the level of activity or volume of production in a business.

Fixed Costs

Costs that do not vary with the level of output or sales, such as rent, salaries, and insurance expenses.

Depreciation

Depreciation is an accounting method of allocating the cost of a tangible asset over its useful life.

Contribution Margin

The amount by which sales revenue exceeds variable costs, used to cover fixed costs and generate profit.