Which of the Following Statements Regarding Fixed Costs Is Incorrect

question 101

Multiple Choice

Which of the following statements regarding fixed costs is incorrect?

• A)Expressing fixed costs on a per unit basis usually is the best approach for decision making.
• B)Fixed costs expressed on a per unit basis will decrease with increases in activity.
• C)Total fixed costs are constant within the relevant range.
• D)Fixed costs expressed on a per unit basis will increase with decreases in activity.

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Definitions:

Diverse Stock Portfolio

An investment strategy that involves holding a variety of different stocks to reduce risk.

Small Investors

Small investors refer to individual or retail investors who invest smaller amounts of money in securities, often lacking the market influence of larger institutional investors.

Equity Investments

Financial assets in companies or properties, representing ownership interest and the potential for dividends or capital gains.

Mutual Fund

An investment vehicle made up of a pool of funds collected from many investors for the purpose of investing in securities such as stocks, bonds, and other assets.