A Fixed Cost Is Relevant If It Is

question 17

Multiple Choice

A fixed cost is relevant if it is

• A)uncontrollable.
• B)avoidable.
• C)sunk.
• D)a product cost.

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Definitions:

Units

The individual articles, products, or services counted to measure and record inventory, production, or sales.

Net Operating Income

A financial metric that calculates a company's income after all operating expenses, excluding taxes and interest, have been deducted from total revenues.

Flexible Budget

A budget that adjusts or varies with changes in volume or activity levels.

Units

In business, units refer to the individual items or quantities of a product or service measured for sale, production, or inventory.