Total Fixed Cost

question 108

Multiple Choice

Total fixed cost

• A)is the sum of all expenses that are closely related to output.
• B)is the sum of those costs that do not change in total no matter how much is produced.
• C)may vary in the short run but is more or less fixed in the long run.
• D)is the sum of all costs of manufacturing and distributing a product.
• E)would be zero if the quantity produced were zero.

Understand the relationship between profit margin, asset turnover, dividend payout, and growth rate.

Calculate the needed fixed assets for projected sales growth.

Understand the concept of external financing needed for growth and how to calculate it.

Learn the impact of maintaining constant ratios (debt-equity ratio, dividend payout ratio) on firm growth.

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Definitions:

Direct Materials

Raw materials that are directly traceable to the manufacturing of a product and constitute a significant portion of the production costs.

Operational Costing

The method of calculating the expenses associated with the day-to-day running of a business, including costs of manufacturing and services.

Food Processors

Kitchen appliances used to facilitate repetitive tasks in the preparation of food, such as chopping or mixing.

Large Scale

Operations or activities conducted on a wide-ranging or extensive basis, often implying significant impact or size.