The Average Fixed Cost Curve

question 107

Multiple Choice

The average fixed cost curve

• A)is a vertical line.
• B)is a horizontal line.
• C)slopes downward to the right as output rises.
• D)is U-shaped (it declines as output rises,reaches a minimum,and then rises).

---

Definitions:

Administrative

Relates to the daily operations and management tasks within an organization, including paperwork and office procedures.

Fixed Cost Element

A cost that does not vary with the level of production or sales, such as rent, salaries, and insurance expenses.

Mixed Cost

A cost that contains both fixed and variable components and changes with the level of activity, but not proportionately.

CVP Analysis

Cost-Volume-Profit (CVP) analysis is a managerial accounting technique used to determine the effects of changes in costs and volume on a company's profits.