Asked by Anastasiia Semenenko on May 29, 2024
Verified
A fixed cost fluctuates in total as activity changes but remains constant on a per unit basis over the relevant range.
Fixed Cost
A fixed cost is a business expense that remains constant regardless of changes in production levels or sales volumes.
Relevant Range
The span of activity or production level within which the assumptions about fixed and variable costs are valid.
Activity Changes
Refers to adjustments or variations in the level of operations or processes within an organization, often impacting costs and productivity.
- Differentiate among variable, fixed, and mixed expenses, analyzing their responses to alterations in activity volumes.
Verified Answer
MK
Matthew KacergisMay 29, 2024
Final Answer :
False
Explanation :
A fixed cost remains constant in total regardless of activity changes. It is a variable cost that fluctuates in total as activity changes but remains constant on a per unit basis over the relevant range.
Learning Objectives
- Differentiate among variable, fixed, and mixed expenses, analyzing their responses to alterations in activity volumes.