Which of the following statements is TRUE about fixed and variable costs?
A)Variable costs are constant in total and fixed costs are constant per unit.
B)Both costs are constant when considered on a total basis.
C)Both costs are constant when considered on a per-unit basis.
D)Fixed costs are constant in total and variable costs are constant per unit.

Question

Quizplus · Accepted Answer

Fixed costs are those that do not change in total even when the level of activity changes, while variable costs change in proportion to the level of activity. Therefore, fixed costs are constant in total and variable costs are constant per unit.

Which of the Following Statements Is TRUE About Fixed and Variable