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Questions and Answers
Which of the following is an example of a variable cost?
Which of the following is an example of a variable cost?
- Salaries of permanent employees
- Rent for the factory building
- Depreciation on machinery
- Cost of raw materials used in production (correct)
What is the primary benefit of calculating the breakeven point?
What is the primary benefit of calculating the breakeven point?
- It provides insight into the level of sales needed to cover all costs (correct)
- It helps determine the minimum selling price for a product
- It aids in forecasting future cash flows
- It helps in deciding the optimal mix of fixed and variable costs
Which of the following costs is considered a fixed cost?
Which of the following costs is considered a fixed cost?
- Commissions paid to salespeople
- Property taxes on the business premises (correct)
- Overtime wages paid to production workers
- Shipping costs for delivering products
What type of cost is considered semi-variable?
What type of cost is considered semi-variable?
At the breakeven point, a company's total revenue is equal to:
At the breakeven point, a company's total revenue is equal to:
What is the breakeven point?
What is the breakeven point?
Which of the following best describes a variable cost?
Which of the following best describes a variable cost?
What happens to the breakeven point if variable costs increase?
What happens to the breakeven point if variable costs increase?
At the breakeven point, what is the relationship between total revenue and total costs?
At the breakeven point, what is the relationship between total revenue and total costs?
Which of the following statements is true about the relationship between variable cost, fixed cost, and volume of production at the breakeven point?
Which of the following statements is true about the relationship between variable cost, fixed cost, and volume of production at the breakeven point?
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