Total Fixed Cost

question 225

Multiple Choice

Total fixed cost

• A) is dependent on production volumes.
• B) stays the same even if production stops temporarily.
• C) includes wages and sales commissions.
• D) is the sum of average fixed costs and variable overheads.
• E) is dependent on minor changes in output volume.

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Definitions:

Marginal Cost

The expenditure required to produce an extra unit of a good or service.

Fixed Cost

A cost that does not change with an increase or decrease in the amount of goods or services produced.

Lawn-mowing

The process of cutting the grass in a lawn to maintain its appearance and health.

Variable Costs

Costs that vary directly with the level of production output, such as materials and labor.