Which of the following statements is true about fixed costs?
A)They can be assigned to a specific item sold or manufactured.
B)They are unaffected by changes in output.
C)Fixed cost per item increases as the number of units produced increases.
D)They include expendables.

Question

Quizplus · Accepted Answer

Fixed costs are costs that do not vary with changes in output such as rent or salaries. They remain the same regardless of how many units are produced. Therefore, statement B is true. Statements A and C are false as fixed costs cannot be assigned to a specific item and fixed cost per item decreases as the number of units produced increases due to cost spreading. Statement D is not necessarily true as fixed costs may or may not include expendables.

Which of the Following Statements Is True About Fixed Costs