Regarding overhead costs,as volume increases:
A)Total fixed cost increases,total variable cost remains constant.
B)Total fixed cost remains constant,total variable cost increases.
C)Total variable cost decreases,total fixed cost remains constant.
D)Both total fixed cost and total variable cost increase.
E)Both total fixed cost and total variable cost remain constant.

Question

Quizplus · Accepted Answer

Overhead costs include both fixed costs (e.g. rent, salaries) and variable costs (e.g. raw materials, utilities). As volume increases, variable costs also increase (e.g. more raw materials are needed to produce more products) but fixed costs remain constant (e.g. rent does not increase with volume). Therefore, total fixed cost remains constant while total variable cost increases.

Regarding Overhead Costs,as Volume Increases