A Discretionary Fixed Cost

question 6

Multiple Choice

A discretionary fixed cost

• A)Remains the same per unit regardless of the level of activity.
• B)Increases as the level of activity increases.
• C)Can be changed in the short run.
• D)Can be changed over the long run.

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Definitions:

Economies of Scale

Cost advantages that enterprises obtain due to their scale of operation, with cost per unit of output generally decreasing with increasing scale.

Medical Coverage

A type of insurance plan that covers the cost of an individual's medical and surgical expenses.

Dental Coverage

Health insurance benefits that cover costs associated with dental care, including preventative services, treatments, and surgeries.

Piece Rates

A pay system where employees are compensated based on the quantity of work they produce, usually at a fixed rate per unit produced.