The Relatively Fixed Costs Such as the Costs of Plant

question 65

Multiple Choice

The relatively fixed costs such as the costs of plant and equipment, which do not increase with an increase in the number of units manufactured, are known as _____.

• A)fixed cost of production
• B)fixed cost of supply
• C)fixed cost of demand
• D)fixed cost of scale

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Definitions:

Net Capital Spending

The amount spent by a company for maintaining or increasing the scope of its assets, minus any sales of fixed assets during the same period.

Net Working Capital

An evaluation of an entity's liquidity level, which is obtained by the subtraction of current liabilities from current assets.

Earnings Per Share

A company's profit divided by the outstanding shares of its common stock, indicating the company's profitability.

Depreciation Expense

An accounting method that allocates the cost of a tangible asset over its useful life.