At an Output of Zero, ________ Is Zero

question 154

Multiple Choice

At an output of zero, ________ is zero.

• A) total fixed cost
• B) total variable cost
• C) total cost
• D) All of the above are correct.

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Definitions:

Accounts Receivable Period

The average number of days it takes for a company to collect payment from its credit sales.

Cash Cycle

The period between the outlay of cash for raw materials and receiving payment from customers for goods or services sold.

Inventory Period

The average time it takes for a company to sell through its inventory, calculated by dividing the total inventory by the cost of goods sold and then multiplying by 365 days.

Accounts Payable Period

The average time it takes for a business to pay off its suppliers and vendors.