The True Statement About Cost Behavior Is That

question 2

Multiple Choice

The true statement about cost behavior is that:

• A) variable costs change on a per-unit basis and change in total as activity changes.
• B) fixed costs are constant on a per-unit basis and change in total as activity changes.
• C) fixed costs are constant on a per-unit basis and are constant in total as activity changes.
• D) fixed costs change on a per-unit basis and are constant in total as activity changes.
• E) variable costs are constant on a per-unit basis and are constant in total as activity changes.

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Definitions:

Lengthy Period

A significantly long duration of time.

Equity Mutual Fund

A type of mutual fund that invests principally in stocks, aiming to provide returns through dividends and capital gains.

Small Investor

An individual who invests limited amounts of money in the stock market or other investment vehicles.

Stock Holdings

The shares owned by an individual or corporation, including stocks in companies or corporations as part of an investment portfolio.