# Those costs that vary with a seasonal demand b

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those costs that vary with: A. seasonal demand. B. quality of the product.

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C. automation. D. production volume. E. All of these. Variable costs are costs that change as the production quantity changes. AACSB: Analytic Blooms: Remember Difficulty: 1 Easy Learning Objective: 13-01 List the four pricing orientations. Topic: 5 Cs of Pricing 97. (p. 277) David manages a Shoney's restaurant. He is considering staying open later in the evening. For David, the variable costs associated with staying open longer hours will include all of the following EXCEPT: Rent is unlikely to be based on hours opened, so this will be a fixed cost. All the other costs could rise when the hours are extended. AACSB: Analytic Blooms: Apply Difficulty: 2 Medium Learning Objective: 13-01 List the four pricing orientations. Topic: 5 Cs of Pricing 98. (p. 277) Variable costs change with: Variable costs are costs that change as the production quantity changes. AACSB: Analytic Blooms: Remember
Difficulty: 1 Easy Learning Objective: 13-01 List the four pricing orientations. Topic: 5 Cs of Pricing 99. (p. 277) Often, at the beginning of a semester, professors are encouraged or directed to allow students to be added to a class after the course has started. For the university, the variable cost of adding another student to a class: Variable costs are costs that change as the production quantity changes. In this case, the "production quantity" is the class size. It costs almost nothing to have an extra student in a class, as long as space is available in the classroom, since professors are not paid on a per-student basis. AACSB: Analytic Blooms: Apply Difficulty: 3 Hard Learning Objective: 13-01 List the four pricing orientations. Topic: 5 Cs of Pricing 100. (p. 277) __________ are costs that remain constant as the volume of production increases or decreases. A. Fixed costs B. Variable costs C. Beneficial costs D. Contribution per unit costs E. Break-even point costs Fixed costs remain constant as the production volume changes. AACSB: Analytic Blooms: Remember Difficulty: 1 Easy Learning Objective: 13-01 List the four pricing orientations. Topic: 5 Cs of Pricing 101. (p. 277) Raymond estimates that the fixed costs associated with opening a new bank branch are

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\$500,000. He expects the branch to attract 1,000 new customer accounts in the first year, each of which will cost \$50 per year to service. He also expects to generate \$100,000 per year in revenue.
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