Which Statement Is True Concerning Direct Fixed Costs

question 52

Multiple Choice

Which statement is true concerning direct fixed costs?

• A)They also called traceable costs.
• B)Profit centre managers are not able to control them.
• C)The often apply to more than one centre.
• D)They are added to controllable margin on a responsibility report.

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Definitions:

Marginal Cost

The expenditure involved in creating one more unit of a product or service.

Average Variable Cost

The cost per unit of producing additional units, excluding fixed costs, and is calculated by dividing total variable costs by the quantity of output.

Total Costs

The complete sum of all expenses a business incurs to produce its goods or services, including both fixed and variable costs.

Output

The cumulative quantity of products or services generated by a corporation, sector, or nation.