Which of the Following Statements Is True When Referring to Fixed

question 150

Multiple Choice

Which of the following statements is true when referring to fixed costs?

• A) Committed fixed costs arise from the annual decisions by management.
• B) As volume increases, unit fixed cost and total fixed cost will change.
• C) Fixed costs increase in total throughout the relevant range.
• D) Discretionary fixed costs can often be reduced to zero for short periods of time without seriously impairing the long-run goals of the company.

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Definitions:

Sales on Account

Revenues generated from sales where payment is deferred to a later date.

Ending Accounts Receivable

The amount of money owed to a company by its customers for goods or services delivered or used but not yet paid for at the end of an accounting period.

Stockholders' Equity

The residual interest in the assets of a company after deducting liabilities, representing the ownership stake of shareholders.

Net Plant

The net book value of a company’s plant assets, typically representing the total cost of these assets minus accumulated depreciation.