As Activity Level Increases, Total Variable Costs

question 50

Multiple Choice

As activity level increases, total variable costs:

• A) increase proportionately with activity.
• B) decrease proportionately with activity.
• C) increase by a fixed amount.
• D) decrease by a fixed amount.

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Definitions:

Electronic Fund Transfer

A digital transaction that moves funds from one account to another without the use of cash or paper checks.

Overdraft

An overdraft occurs when money is withdrawn from a bank account and the available balance goes below zero, leading to a negative balance.

Dishonored Check

A check that a bank refuses to pay or clear, typically because there are insufficient funds in the account on which it is drawn.

Certified Check

A personal check guaranteed by the issuing bank, ensuring that the check writer has sufficient funds for the check to clear.