Select the Incorrect Statement Regarding Fixed and Variable Costs

question 144

Multiple Choice

Select the incorrect statement regarding fixed and variable costs.

• A) Fixed cost per unit remains constant as the number of units increases.
• B) Total variable cost is represented by a straight line sloping upward from the origin when total variable cost is graphed versus number of units.
• C) The concept of relevant range applies to both fixed costs and variable costs.
• D) The terms "fixed" and "variable" refer to the behavior of total cost.

---

Definitions:

Current Assets

Assets that are expected to be converted into cash, sold, or consumed within one year or within the business's normal operating cycle if longer.

Operating Cycle

The average period of time it takes for a business to convert its inventory into cash through sales.

Twelve Months

A term commonly used in finance and business to refer to a full fiscal or calendar year.

Long-Term Debt

Debt obligations due for repayment in more than one year, often used for significant business investments.