Discovery of Potential Problems When Buying a Business Is the Responsibility

question 28

Multiple Choice

Discovery of potential problems when buying a business is the responsibility of the ________.

• A) Buyer
• B) Seller
• C) Legal authorities
• D) Employees
• E) Customers

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Definitions:

Variable Costs

Variable costs are expenses that change in proportion to the activity of a business, such as costs for raw materials or production.

Cost-volume-profit Analysis

A financial accounting technique that calculates how variations in costs and sales volume impact a firm's profitability.

Fixed Costs

Fixed costs are expenses that do not change with the level of production or sales, such as rent, salaries, and insurance premiums.

Variable Costs

Expenses that change in proportion with the level of business activity or production volume, such as raw materials and direct labor costs.