Which of the Following Increases as Volume of Activity Decreases

question 54

Multiple Choice

Which of the following increases as volume of activity decreases?

• A) Fixed cost per unit
• B) Variable cost per unit
• C) Total fixed cost
• D) Total variable cost

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Definitions:

Paid-In Capital

Paid-in capital is the amount of money that shareholders have directly invested in a company by purchasing shares during the initial offering or through secondary market transactions.

Par Value

The nominal or face value of a bond, share, or other financial instrument, as stated on the certificate or instrument.

Stockholders' Equity

The ownership interest of shareholders in a company, represented by the amount of capital contributed plus retained earnings minus liabilities.

Treasury Stock

Shares that were issued and subsequently reacquired by the issuing company, reducing the amount of outstanding stock.