Which of the Following Is True About Auctions

question 48

Multiple Choice

Which of the following is true about auctions?

• A) Acceptance occurs when an offeror makes the highest bid.
• B) Bidders are treated as offerors, making offers the seller is free to accept or reject.
• C) An item cannot be withdrawn from sale prior to acceptance.
• D) The seller is required to accept the final offer when the auction is advertised as being "with reserve."

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Definitions:

Common Fixed Expenses

Fixed costs that are not directly attributable to a specific product or service line and must be paid regardless of the level of production or sales.

Contribution Margin

The amount remaining from sales revenue after variable costs have been deducted, indicating how much revenue contributes to covering fixed costs.

Variable Selling Expense

Expenses that fluctuate in direct proportion to sales volume, including commissions and freight fees.

Fixed Manufacturing Overhead

Expenses related to manufacturing that remain constant regardless of the number of units produced, including property taxes and rent for factory buildings.