Which of the following best describes a fixed cost?
A)It may change in total when such change is unrelated to changes in production volume.
B)It may change in total when such change is related to changes in production volume.
C)It is constant per unit of change in production volume.
D)It may change in total when such change depends on production volume within the relevant range.

Question

Quizplus · Accepted Answer

A fixed cost is a cost that does not vary with changes in production volume. However, it may change in total when such change is unrelated to changes in production volume (e.g. rent, salaries, insurance, etc.).

Which of the Following Best Describes a Fixed Cost