When Expressed on a Per Unit Basis, Fixed Costs Can

question 190

True/False

When expressed on a per unit basis, fixed costs can mislead decision makers into thinking of them as variable costs.

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Definitions:

Available Seat

A term often used in the transportation industry, referring to a seat that is unoccupied and can be reserved or purchased by a customer.

Load Factor

A measurement used in transportation to assess the efficiency of a carrier by comparing the amount of utilized space or weight capacity versus the total available.

Operating Expense

Expenses incurred during the normal functioning of a business, excluding the cost of goods sold and fixed costs.

Yield

The amount of product or profit produced from a particular investment or process, measured in terms of return on investment or output per unit of input.