Which of the Following Is NOT Correct

question 9

Multiple Choice

Which of the following is NOT correct?

• A) The operating cycle sometimes is longer than one year in duration.
• B) The operating cycle always is one year in duration.
• C) The operating cycle sometimes is shorter than one year in duration.
• D) The operating cycle is a concept applicable both to manufacturing and retailing enterprises.

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Definitions:

Variable Selling Costs

Expenses that vary directly with the volume of products sold, such as commissions and shipping fees.

Break-Even Point

The level of production or sales at which total revenues equal total costs, resulting in no profit or loss.

Variable Costs

Costs that fluctuate with the level of output or production, such as raw materials and direct labor.

Contribution Margin

The amount by which a product's sales price exceeds its variable costs. It contributes to covering fixed costs and generating profit.