Fixed cost in break-even analysis refers to the cost that
A) remains constant no matter how many units are produced.
B) covers the initial capital expenditures.
C) covers everything but employee compensation.
D) declines after the break-even point has been reached.

Question

Quizplus · Accepted Answer

Fixed cost in break-even analysis refers to the cost that remains constant, regardless of the number of units produced. This cost includes expenses such as rent, insurance, property taxes, and salaries of employees who are not directly involved in production. Therefore, option A is the correct answer.

Fixed Cost in Break-Even Analysis Refers to the Cost That