Which of the Following Statements Regarding Fixed Costs Is True

question 44

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 labour 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:

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