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Problem 1: Which of the following statements describes variable costs?
a. Costs that vary on per-unit basis as the level of activity changes
b. Costs that vary in total in direct proportion to changes in the level of activity
c. Costs that remain the same in total dollar amount as the level of activity changes
d. Costs that vary on a per-unit basis but remain the same in total as the level of activity changes
Problem 2: In establishing credit standards, the firm must consider the nature of the credit risk based on all of the following, except:
a. Prior record of payment
b. Current networth
c. Terms of credit
d. Financial stability
Problem 3: The following are methods of paying dividends which one is not
a. conservation of cash
b. cash
c. stock split
d. bonus issue
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