Fixed Cost Refers to

question 360

Multiple Choice

Fixed cost refers to

• A)the sum of the expenses of the firm that vary directly with the quantity of a product that is produced and sold.
• B)the expense incurred by a firm in producing and marketing a product.
• C)the sum of the expenses of the firm that are stable and do not change with the quantity of a product that is produced and sold.
• D)the average amount of money received for selling one unit of a product or simply the price of that unit.
• E)the sum of the expenses of the firm deducted from the revenue generated by the sale of the product.

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Definitions:

Inventory Returns Estimated

An estimate of the value or volume of goods that are expected to be returned by customers over a specific period.

Sales Refund Payable

Obligations to return funds received from customers due to returns or refunds of products or services.

Sales Returns

Transactions in which customers return previously purchased merchandise for a refund, store credit, or exchange.

Merchandise Inventory

Goods that a company owns and intends to sell as part of its regular business operations, usually in the retail sector.