Fixed Costs

question 142

Multiple Choice

Fixed costs:

• A) vary on a per- unit basis, but are fixed in total
• B) are fixed on a per- unit basis, and fixed in total
• C) vary on a per- unit basis, and vary in total
• D) are fixed on a per- unit basis, but vary in total

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Definitions:

Expense Account

An accounting account that tracks money spent or costs incurred in a business entity's operation.

Perpetual Inventory System

An inventory management accounting method that instantly documents transactions of buying or selling inventory via computerized point-of-sale systems and enterprise asset management applications.

Merchandise Inventory

The total cost of all goods that are available for sale during a certain period, including purchases and adjustments for returns or damages.

Inventory On Hand

Refers to the total amount of items or products available in stock by a business at any given time.