With Respect to Fixed Costs,CVP Analysis Assumes Total Fixed Costs

question 47

Multiple Choice

With respect to fixed costs,CVP analysis assumes total fixed costs

• A)per unit remain constant as volume changes.
• B)remain constant from one period to the next.
• C)vary directly with volume.
• D)remain constant across changes in volume.

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Definitions:

Variable Costing

A pricing strategy that incorporates only variable manufacturing expenses such as direct materials, direct labor, and variable factory overhead into the cost of products.

Absorption Costing

A method of cost calculation that takes into account all expenses related to manufacturing, such as direct materials, direct labor, and all overheads, whether fixed or variable, in determining a product's cost.

Production Cost

The total cost of materials, labor, and overheads incurred in the production of goods or services.

Per Unit

A term referring to a measurement or cost on an individual item or quantity basis.