An organization accumulated the following data for the prior fiscal year: Value of Percentage of Quarter Output Produced Cost X 1 $4,750,000 2.9 2 $4,700,000 3.0 3 $4,350,000 3.2 4 $4,000,000 3.5 Based on this data, which of the following describes the value of Cost X in relation to the value of Output Produced?
A) Cost X is a variable cost.
B) Cost X is a fixed cost.
C) Cost X is a semi-fixed cost.
D) Cost X and the value of Output Produced are unrelated.

Question

Quizplus · Accepted Answer

The percentage of Cost X increases as the output produced decreases, indicating that Cost X does not vary directly with production levels, which is characteristic of a fixed cost.

An Organization Accumulated the Following Data for the Prior Fiscal