A fixed cost is a cost which
A) varies in total with changes in the level of activity.
B) remains constant per unit with changes in the level of activity.
C) varies inversely in total with changes in the level of activity.
D) remains constant in total with changes in the level of activity.

Question

Quizplus · Accepted Answer

A fixed cost remains constant in total with changes in the level of activity. For example, rent for a building is a fixed cost that remains the same regardless of how many units are produced or sold.

A Fixed Cost Is a Cost Which