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Variable Costs

Question 1

Multiple Choice

Variable costs:


A) change in direct relationship to the quantity of output produced.
B) are constant in the short-run regardless of the quantity of output produced.
C) are equal to the change in a variable when one more unit of output is produced.
D) are subtracted from fixed costs to compute the contribution margin.
E) form the basis that is used to determine the degree of operating leverage employed by a firm.

Correct Answer:

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