Which of the Following Statements Is True Regarding a Direct

question 7

Multiple Choice

Which of the following statements is true regarding a direct fixed cost?

• A)The corporate jet expenditure is an example of a direct fixed cost.
• B)These costs are not associated with individual products.
• C)These costs do not vary with sales volume.
• D)These costs are spread out over many years and sometimes different products.

---

Definitions:

Cost Centres

Divisions or units within an organization that do not directly generate revenue but incur costs, used for budgeting and cost control.

Cost Drivers

Factors that cause the costs of an activity to go up or down, like machine-hours or labor-hours, affecting the total cost of production.

Service Costs Accuracy

The precision with which the costs associated with delivering a service are measured and allocated.

Professional Services

Specialized services offered by trained professionals in various fields, such as legal, accounting, consulting, and medical services.