Variable costs that are proxies for long-term costs should be used to measure profitability.

Name: Variable costs that are proxies for long-term costs should be used to measure profitability.
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Question

Quizplus · Accepted Answer

Variable costs only capture short-term costs and do not take into account long-term investments or expenses that may affect profitability. Therefore, it is important to consider other factors such as fixed costs and capital expenditures when measuring profitability.

Variable Costs That Are Proxies for Long-Term Costs Should Be