Fixed costs,
A) in total, remain constant within a relevant range
B) in total, increase as activity increases
C) in total, decrease as activity decreases
D) on a per unit basis, are constant as activity increases or decreases

Question

Quizplus · Accepted Answer

Fixed costs remain constant in total within a relevant range, which means that regardless of the level of activity, the fixed costs will not change. However, on a per unit basis, fixed costs will decrease as activity increases and increase as activity decreases. But the total fixed cost remains the same within a relevant range.

Fixed Costs