Which of the Following Statements Regarding Fixed Costs Is Incorrect

question 63

Multiple Choice

Which of the following statements regarding fixed costs is incorrect

• A)Fixed costs expressed on a per unit basis will react inversely with changes in activity.
• B)Expressing fixed costs on a per unit basis usually is the best approach for decision-making.
• C)Assumptions by accountants regarding the behaviour of fixed costs rest heavily on the concept of the relevant range.
• D)Fixed costs frequently represent long-term investments in property, plant, and equipment.

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Definitions:

Type I Error

The mistake of rejecting the null hypothesis when it is actually true.

Null Hypothesis

The default hypothesis that there is no effect or no difference, and any observed effect is due to sampling variability.

Type I Error

The probability of rejecting the null hypothesis when it is actually true, also known as a false positive.

Type II Error

A statistical mistake of failing to reject a false null hypothesis; also known as a false negative.