In Contrast to a Variable Cost

question 12

Multiple Choice

In contrast to a variable cost,

• A)the total amount of a fixed cost does not change with activity level.
• B)the total amount of a fixed cost increases as activity increases.
• C)the per unit amount of a fixed cost does not change with activity level.
• D)the per unit amount of a fixed cost increases as activity increases.

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Definitions:

Withheld

Refers to a portion of an employee's wages not paid out directly to them but instead held back for purposes such as tax payments.

Social Security

A government program that provides financial assistance to people with insufficient or no income, especially the elderly, disabled, and unemployed.

Medicare

A federal health insurance program in the United States for people who are 65 or older, certain younger people with disabilities, and people with End-Stage Renal Disease.

Federal Unemployment Taxes

Taxes paid by employers to fund the federal government's oversight of the state's unemployment compensation programs.