A factory manager is not sure how to associate the fixed value of the real estate taxes for the factory with the changes in the amounts of a particular product produced during the year. The concept most relevant to this problem is
A) Interchangeability
B) Homogeneity
C) Variability
D) Interdependence

Question

Quizplus · Accepted Answer

Real estate taxes for the factory are fixed costs that do not vary with the amount of product produced. The concept of variability is most relevant here, as it deals with how costs change (or do not change) with changes in production levels. Fixed costs, like real estate taxes, do not vary with production levels, highlighting the variability (or lack thereof) in relation to production amounts.

A Factory Manager Is Not Sure How to Associate the Fixed