A fixed cost:
A) Does not change with changes in the volume of activity within the relevant range.
B) Changes with changes in the volume of activity within the relevant range.
C) Requires the future outlay of cash and is relevant for future decision making.
D) Is directly traceable to a cost object.
E) Is irrelevant for cost-volume-profit and short-term decision making.

Question

Quizplus · Accepted Answer

A fixed cost does not change with changes in the volume of activity within the relevant range. This means that the cost remains constant regardless of how many units are produced or sold. This makes it an important consideration for cost-volume-profit analysis and short-term decision making.

A Fixed Cost