If Fixed Cost Rises

question 61

Multiple Choice

If fixed cost rises,

• A)the profit-maximizing level of output would decrease.
• B)the profit-maximizing level of output would not change.
• C)marginal cost rises.
• D)variable cost falls.

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Definitions:

Revenue Recognition Principle

An accounting principle that outlines the specific conditions under which revenue is recognized.

Unearned Rent Revenue

Income received by a company for rent that has not yet been earned because the service period has not occurred.

Unearned Service Revenue

Income received by a company for services yet to be performed; considered a liability until the service is delivered.

Accounts Payable

Liabilities of a business that are owed to creditors for goods and services purchased on credit.