A Fixed Cost Is a Cost Which

question 37

Multiple Choice

A fixed cost is a cost which

• A) varies in total with changes in the level of activity.
• B) remains constant per unit with changes in the level of activity.
• C) varies inversely in total with changes in the level of activity.
• D) remains constant in total with changes in the level of activity.

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Definitions:

Financing Activities

Transactions and events where cash flow comes into the company to help in financing its operations or to fund the expansion of its business.

Investing Activities

Transactions involving the purchase and sale of long-term assets and other investments not included in cash equivalents.

Accounts Receivable

The amount due to an enterprise by its clients for delivered goods or services awaiting payment.

ACP

Average Collection Period, a metric indicating the average number of days it takes for a company to receive payments owed by its customers.