Which of the Following Statements Regarding Fixed Costs Is TRUE

question 113

Multiple Choice

Which of the following statements regarding fixed costs is TRUE?

• A) Fixed costs rise by a constant amount for every added unit of volume.
• B) While fixed costs are ordinarily constant with respect to volume, they can "step" upward if volume increases result in additional fixed costs.
• C) Fixed costs are those costs associated with direct labor and materials.
• D) Fixed costs equal variable costs at the break-even point.
• E) Fixed cost is the difference between selling price and variable cost.

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Definitions:

Uniform State Laws

Laws enacted by various states that are intended to be consistent across jurisdictions, usually through the adoption of model statutes.

Model Laws

Laws created to account for the variability of laws among states. These laws serve to standardize the otherwise different interstate laws. Also called uniform laws.

Uniformity

The state of being the same in form, manner, appearance, or degree; often sought in laws to ensure consistency.

Prosecuted

To bring legal action against an individual or entity, seeking to prove their guilt in a court of law.