Variable Costs

question 70

Multiple Choice

Variable costs:

• A) vary indirectly with changes in activity level.
• B) vary directly with changes in activity level.
• C) vary on a per unit basis.
• D) vary indirectly with changes in activity level AND vary on a per unit basis.

---

Definitions:

Inherited Property

Property one receives from a deceased person's estate, subject to specific tax rules and basis determinations.

Inventory

Goods and materials a business holds for the ultimate goal of resale or production.

Section 1231

This is a section of the U.S. Internal Revenue Code that provides favorable tax treatment for gains and losses on the sale or exchange of certain types of property used in a trade or business.

Capital Losses

Capital losses occur when the sale of a capital asset, such as stocks or real estate, results in a loss, which can offset capital gains for tax purposes.