Total Cost

question 188

Multiple Choice

Total cost:

• A) increases directly with increases in total variable cost.
• B) is zero at zero output.
• C) is fixed in total no matter how much is produced.
• D) increases directly with increases in total fixed cost.
• E) None of these alternatives is correct.

---

Definitions:

Unit Sales

The measure of the quantity of units of a product sold by a company, often used as an indicator of demand and financial health.

Monthly Target Profit

The profit goal set by a business to achieve within a one-month period.

Degree of Operating Leverage

A financial ratio that measures the sensitivity of a company's operating income to its sales, illustrating how revenue growth translates into growth in operating income.

Net Operating Income

A company's revenue minus its operating expenses, excluding tax and interest, representing the profit from core business operations.