A cost that changes with the level of output is

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59. A cost that changes with the level of output is called a(n) _____ cost. a. liquidity b. variable c. fixed d. asset e. elastic ANS: B
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An example of a variable cost is the cost of materials. PTS: 1 REF: 302 OBJ: 19-5 TYPE: Def TOP: AACSB Reflective Thinking | TB&E Model Pricing 60. Which of the following is most likely to be a variable cost for an Internet retailer that sells spices, herbs, and seasonings to consumers? PTS: 1 REF: 302 OBJ: 19-5 TYPE: App TOP: AACSB Reflective Thinking | TB&E Model Pricing 61. For a nail salon, the costs associated with the purchase of nail polish and other products like nail polish remover, sterilized equipment, laundry service for the towels, and the beverages given to customers, are all examples of _____ costs. PTS: 1 REF: 302 OBJ: 19-5 TYPE: Def TOP: AACSB Reflective Thinking | TB&E Model Pricing 62. _____ costs do not change as output is increased or decreased. PTS: 1 REF: 302 OBJ: 19-5 TYPE: Def TOP: AACSB Reflective Thinking | TB&E Model Pricing 63. Central Bark is a dog resort where pets are pampered. Which of the following is the BEST example of one of its fixed costs? a. payment on the building used by Central Bark b. dog biscuits c. dog collars and leashes d. bubble bath e. advertisements in local magazines
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ANS: A The payment on the building remains the same, no matter how many dogs are visit the resort. PTS: 1 REF: 302 OBJ: 19-5 TYPE: App TOP: AACSB Reflective Thinking | TB&E Model Pricing 64. Mitch owns a pet boarding kennel. The monthly payment on the land he purchased for his kennel, the mortgage on his small office building, and his business license are all examples of _____ costs. PTS: 1 REF: 302 OBJ: 19-5 TYPE: App TOP: AACSB Reflective Thinking | TB&E Model Pricing 65. _____ cost is the change in total costs associated with a one-unit change in output. PTS: 1 REF: 302 OBJ: 19-5 TYPE: Def TOP: AACSB Reflective Thinking | TB&E Model Pricing
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