Which of the following statements is true?
A)Total variable costs do not vary with changes in sales volume.
B)Total fixed cost per unit do not vary with changes in sales volume.
C)Total fixed costs do not vary with changes in sales volume.
D)Total costs do not vary with changes in sales volume.

Question

Quizplus · Accepted Answer

Total fixed costs do not vary with changes in sales volume as they are costs that are consistent regardless of the level of production or sales. Total variable costs, on the other hand, do vary with changes in sales volume as they include costs such as materials, labor, and other expenses that increase or decrease depending on the level of production or sales. Total costs, in general, will vary with changes in sales volume as they are the sum of both the fixed and variable costs. Option A and B are incorrect as they are opposite to the actual statement.

Which of the Following Statements Is True