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:

Principal

The main party to a transaction, agreement, or contract, often responsible for fulfilling the obligations set within.

Third Persons

Individuals who are not a direct party to a legal agreement or transaction but may be affected by it or have certain rights or obligations related to it.

Consideration

Something of value exchanged between parties in a contract, making the agreement binding and legally enforceable.

Authorized

Having official permission or approval.